01—Abstract
Summary
Summary of the 10-K filed February 18, 2011. Cited figures are marked; the original filing is the authoritative source.
Bristol-Myers Squibb Company (BMY) reported strong performance in 2010, with net sales increasing by 4% to $19.5 billiona, driven primarily by key products like PLAVIX, the HIV franchise, and ABILIFY, alongside new launches ONGLYZA and KOMBIGLYZE.
The company also made significant advancements in its pipeline with drugs like YERVOY and ELIQUIS. However, the company faces significant upcoming challenges, most notably the expected loss of market exclusivity for PLAVIX in the U.S. in May 2012, which is projected to lead to a material decline in sales and cash flow.
The company is actively managing costs through its Productivity Transformation Initiative (PTI) and focusing on strategic acquisitions and collaborations. Investors should closely monitor the impact of patent expirations, particularly for PLAVIX and AVAPRO/AVALIDE, and the company's ability to successfully bring its late-stage pipeline products to market.
02—Key points
Key Highlights
- Net sales grew 4% to $19.5 billion in 2010, driven by key products like PLAVIX and ABILIFY, as well as the HIV franchise and ONGLYZA/KOMBIGLYZE.
- Significant pipeline advancements were reported for YERVOY, ELIQUIS, and other promising compounds.
- The company faces substantial upcoming challenges due to the expected loss of U.S. market exclusivity for PLAVIX in May 2012 and AVAPRO/AVALIDE in March 2012.
- BMY completed the acquisition of ZymoGenetics in October 2010 as part of its 'string-of-pearls' acquisition and licensing strategy.
- The company met its $2.5 billion Productivity Transformation Initiative (PTI) cost savings goal, reflecting a focus on operational efficiency.
- BMY repurchased $576 million of its common stock in 2010, signaling a commitment to shareholder returns.
- A voluntary recall of certain lots of AVALIDE* impacted sales and supply, highlighting manufacturing and supply chain risks.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Bristol Myers Squibb Co kept $0.16.
- Revenue$19.48B100.0%
- Cost of revenue−$5.28B27.1%
- Gross profit$14.21B72.9%
- Operating costs−$11.11B57.0%
- Operating income$3.10B15.9%
- Interest, other & tax$-00.0%
- Net income$3.10B15.9%
Where FY2010 revenue went
$19.48B- Cost of revenue: $5.28B, 27% of revenue
- Other operating costs: $3.85B, 20% of revenue
- SG&A: $3.69B, 19% of revenue
- R&D: $3.57B, 18% of revenue
- Net income: $3.10B, 16% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 18, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $19.48B$18.81B | +3.6% |
| Cost of Revenue | $5.28B$5.14B | +2.7% |
| Gross Profit | $14.21B$13.67B | +3.9% |
| R&D Expenses | $3.57B$3.65B | −2.2% |
| SG&A Expenses | $3.69B$3.95B | −6.6% |
| Operating Expenses | $13.41B$13.21B | +1.6% |
| Operating Income | $3.10B$3.24B | −4.2% |
| Interest Expense | $145.00M$184.00M | −21.2% |
| Net Income | $3.10B$10.61B | −70.8% |
| EPS (Basic) | $1.80$5.35 | −66.4% |
| EPS (Diluted) | $1.79$5.34 | −66.5% |
| Shares Outstanding (Basic) | 1.71B1.97B | −13.2% |
| Shares Outstanding (Diluted) | 1.73B1.98B | −12.7% |
05—Questions
Frequently Asked Questions
What are Bristol-Myers Squibb's (BMY) top-selling products and their importance?
BMY's top-selling products in 2010 were PLAVIX ($6.7 billion in sales, representing 34% of total net sales) and ABILIFY ($2.6 billion in sales, 13% of total net sales). These two products were critical to the company's revenue and earnings. Other significant contributors included AVAPRO/AVALIDE, REYATAZ, and the SUSTIVA Franchise, each with over $1.1 billion in sales.
What are the major risks facing BMY in the near future?
The most significant near-term risk is the loss of market exclusivity for key products. PLAVIX is expected to lose U.S. market exclusivity in May 2012, and AVAPRO/AVALIDE in March 2012. The company anticipates a "rapid, precipitous and material decline" in sales for PLAVIX following exclusivity loss. Additionally, BMY faces intense competition from generic products and pricing pressures from managed care organizations and government programs.
How is BMY addressing the upcoming patent expirations and competitive pressures?
BMY is focused on a multi-pronged strategy: 1) Supporting and growing its currently marketed products, 2) Advancing its late-stage pipeline to bring new innovative products to market (e.g., YERVOY, ELIQUIS), 3) Managing costs through initiatives like the Productivity Transformation Initiative (PTI), and 4) Pursuing strategic acquisitions and licensing opportunities ('string-of-pearls') to strengthen its product portfolio.
What is the status of BMY's pipeline, particularly in late-stage development?
BMY had several promising late-stage pipeline candidates in 2010. Key developments included advancements for YERVOY (ipilimumab) for melanoma, with regulatory submissions in the U.S. and EU; ELIQUIS (apixaban) for thrombosis and atrial fibrillation, with U.S. and EU submissions expected in 2011; and NULOJIX (belatacept) for transplant rejection, awaiting FDA approval. Dapagliflozin for diabetes also advanced with submissions in the U.S. and EU.
06—Continue