10-KPeriod: FY2012

BRISTOL MYERS SQUIBB CO Annual Report, Year Ended Dec 31, 2012

Filed February 15, 2013For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb (BMY) reported its 2012 fiscal year results, marked by significant shifts due to patent expirations on key products like Plavix and Avapro/Avalide. These losses led to a substantial decline in net sales and earnings compared to the prior year. Despite these challenges, the company made strategic acquisitions, notably Amylin Pharmaceuticals, to bolster its diabetes franchise and advanced its pipeline with key regulatory approvals for Eliquis and Orencia's subcutaneous formulation. BMS is actively managing its R&D portfolio, focusing on immuno-oncology, cardiovascular/metabolic disease, and virology, while also expanding its biologics capabilities. The company's financial health remains robust, supported by ongoing product sales, strategic alliances, and a focus on cost management, though it faces continued pricing pressures and the ever-present threat of generic competition in the biopharmaceutical industry.

Financial Highlights

58 data points
Beta

Revenue

$17.62B

73.8% Gross Margin

Net Income

$1.96B

11.1% Net Margin

EPS (Diluted)

$1.16

Total Assets

$35.90B

Cash & Equivalents

$1.66B

Free Cash Flow

$6.39B

Financial Statements
Beta
Revenue$17.62B
Cost of Revenue$4.61B
Gross Profit$13.01B
R&D Expenses$3.90B
SG&A Expenses$4.22B
Operating Expenses$15.28B
Interest Expense$182.00M
Net Income$1.96B
EPS (Basic)$1.17
EPS (Diluted)$1.16
Shares Outstanding (Basic)1.67B
Shares Outstanding (Diluted)1.69B

Key Highlights

  • 1Significant decline in net sales (-17%) and net earnings attributable to BMS (-47%) in 2012 compared to 2011, primarily due to loss of exclusivity for Plavix and Avapro/Avalide.
  • 2Acquisition of Amylin Pharmaceuticals for $5.3 billion in August 2012 to strengthen the diabetes franchise.
  • 3Key regulatory approvals received for Eliquis (stroke prevention in NVAF) and Orencia (subcutaneous formulation).
  • 4Research and Development expenses increased slightly to $3.9 billion in 2012, with a significant $1.8 billion impairment charge related to the discontinuation of BMS-986094 due to patient safety concerns.
  • 5Total cash, cash equivalents, and marketable securities decreased significantly from $11.6 billion in 2011 to $6.4 billion in 2012, largely due to acquisition-related cash usage.
  • 6Increased debt by $1.9 billion primarily to finance the Amylin acquisition.
  • 7Restructured alliance with Sanofi in September 2012, impacting future revenue sharing for Plavix and Avapro/Avalide.
  • 8Increased share repurchase authorization by $3.0 billion in June 2012, with $2.4 billion used during the year.

Frequently Asked Questions

The primary driver for the significant decrease in Bristol-Myers Squibb's revenue in 2012 was the loss of market exclusivity for key products, most notably Plavix (clopidogrel bisulfate) and Avapro/Avalide (irbesartan/irbesartan-hydrochlorothiazide). This led to a substantial decline in sales for these products due to the entry of generic competition.

Bristol-Myers Squibb engaged in a strategic restructuring of its alliance with Sanofi in September 2012. This restructuring involved Sanofi assuming worldwide operations for certain products (except for Plavix in the U.S. and Puerto Rico) in exchange for quarterly royalties and a terminal payment. The company had been preparing for these exclusivity losses for several years.

Bristol-Myers Squibb is focusing its research and development efforts on key therapeutic areas such as immuno-oncology, cardiovascular/metabolic disease, and virology. Notable pipeline developments include the U.S. approval of Eliquis for stroke prevention in patients with nonvalvular atrial fibrillation and the expansion of its biologics capabilities, with more than 40% of its pipeline compounds being biologics.

The acquisition of Amylin Pharmaceuticals in August 2012 for $5.3 billion significantly impacted Bristol-Myers Squibb's financial position. It led to a substantial increase in goodwill and other intangible assets, utilized a significant portion of cash reserves, and required the issuance of $2.0 billion in senior unsecured notes. While it aimed to bolster the diabetes franchise, it also increased expenses and debt levels.