01—Abstract
Summary
Summary of the 10-K filed February 9, 2022. Cited figures are marked; the original filing is the authoritative source.
Bristol-Myers Squibb's 2021 Form 10-K shows a company in transition: total revenues rose 9% to $46.4 billiona, driven by Eliquis (+17% to $10.8 billion), Opdivo (+8% to $7.5 billion) and newer launches, which together offset the expected decline in Revlimid and other mature products.
GAAP diluted EPS was $3.12b versus a GAAP loss of $3.99 in 2020, which was distorted by the $11.4 billion MyoKardia IPRD charge; non-GAAP EPS rose to $7.51 from $6.44. Operating cash flow reached $16.2 billion, and management is prioritizing debt reduction and shareholder returns, including $6.2 billion of buybacks in 2021 and a $5.0 billion accelerated share repurchase announced in February 2022. The key investor debate is patent cliff risk.
Revlimid, which generated $12.8 billionc in 2021, faces volume-limited U.S. generic entry beginning March 2022 and broader European generic entry in early 2022, with 2022 Revlimid revenue guided to $9.5 to $10.0 billion. Eliquis U.S. exclusivity was upheld on appeal, but the earliest generic launch is April 2028 under settlements, and European litigation is pending. Pipeline setbacks, including the deucravacitinib UC Phase 2 miss and the FDA extension for mavacamten, add near-term uncertainty.
Balance sheet leverage remains the central financial theme. Net debt was $27.6 billiond at year-end 2021, down from $34.4 billion, and intangible assets fell to $42.5 billion after $1.2 billion of impairments. Management expects about $3.0 billion of Celgene integration synergies through 2022, and the company is still working through the Celgene CVR litigation and several product liability and antitrust matters.
02—Key points
Key Highlights
- Total revenues grew 9% to $46.4 billion in 2021, with U.S. revenues up 10% to $29.2 billion and international revenues up 8% to $17.2 billion.
- GAAP diluted EPS was $3.12 (vs. a $3.99 loss in 2020); non-GAAP diluted EPS rose 17% to $7.51, reflecting Eliquis, Opdivo/Yervoy and new launches.
- Eliquis revenue rose 17% to $10.8 billion; the U.S. composition-of-matter and formulation patents were upheld on appeal, with the earliest settled generic launch date of April 1, 2028.
- Revlimid, the largest product at $12.8 billion (+6%), faces volume-limited U.S. generics from March 2022 and broader EU generic entry in early 2022; 2022 revenue is guided to $9.5 to $10.0 billion.
- Net debt fell to $27.6 billion from $34.4 billion; the company repurchased $6.2 billion of stock in 2021 and announced a $5.0 billion ASR in February 2022, with $15.2 billion of remaining authorization.
- Operating cash flow was $16.2 billion, up from $14.1 billion, and dividends paid were $4.4 billion; capital expenditures were about $1.0 billion.
- Intangible assets declined to $42.5 billion from $53.2 billion, driven by amortization of $10.0 billion and $1.2 billion of impairments, and the company has about $15.1 billion of debt maturities through 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 9, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $46.38B$42.52B | +9.1% |
| Cost of Revenue | $9.94B$11.77B | −15.6% |
| Gross Profit | $36.45B$30.75B | +18.5% |
| R&D Expenses | $10.20B$10.05B | +1.5% |
| SG&A Expenses | $7.69B$7.66B | +0.4% |
| Operating Expenses | $38.29B$49.39B | −22.5% |
| Interest Expense | $1.33B$1.42B | −6.1% |
| Net Income | $6.99B-$9.02B | +177.6% |
| EPS (Basic) | $3.15$-3.99 | +178.9% |
| EPS (Diluted) | $3.12$-3.99 | +178.2% |
| Shares Outstanding (Basic) | 2.22B2.26B | −1.6% |
| Shares Outstanding (Diluted) | 2.25B2.26B | −0.6% |
05—Questions
Frequently Asked Questions
How exposed is BMS to the loss of exclusivity on its major products?
Substantially exposed in the near term. Revlimid ($12.8 billion in 2021 revenue) faces generic entry beginning March 2022 for volume-limited U.S. licenses and in several EU markets from early 2022, with full U.S. generic licenses from January 2026. Abraxane U.S. generics are expected from March 2022, and Pomalyst is not expected to face U.S. generic entry before Q1 2026. Management says growth from the in-line and new product portfolio will more than offset expected declines through 2025, but this depends on successful launches such as Breyanzi, Abecma, Zeposia and Reblozyl.
Why did GAAP earnings swing from a loss in 2020 to a profit in 2021?
The 2020 GAAP loss of $3.99 per share was driven by the $11.4 billion IPRD charge for the MyoKardia acquisition, which was treated as an asset acquisition, along with large inventory purchase price adjustments and tax charges. In 2021 there was no comparable IPRD charge, and total expenses fell 22% to $38.3 billion, which produced a GAAP profit of $3.12 per share. Management's non-GAAP EPS of $7.51 excludes amortization of acquired intangibles, integration costs, and equity and CVR fair value adjustments.
How is BMS reducing its debt and returning capital to shareholders?
In 2021 BMS repurchased $6.2 billion of common stock and paid $4.4 billion in dividends, and it redeemed $3.5 billion of long-term debt through tender offers and make-whole redemptions for about $4.0 billion in cash. Long-term debt fell to $39.6 billion from $48.3 billion. In February 2022 it committed another $5.0 billion to an accelerated share repurchase, and it renewed its credit facilities with a new $5.0 billion five-year revolver. The company says it remains committed to reducing debt while returning capital.
What are the main litigation and pipeline risks investors should watch?
Key litigation risks include the Celgene CVR breach-of-contract suit and securities class actions over the liso-cel approval milestone, a potential $6.4 billion CVR obligation, the Plavix Hawaii penalty of $417 million attributed to BMS (under appeal), the Eliquis European revocation lawsuits in the UK and several other countries, and Humana and other Thalomid/Revlimid antitrust cases. On the pipeline side, the FDA extended the mavacamten review to April 28, 2022, deucravacitinib missed its Phase 2 UC endpoint, and Opdivo's HCC accelerated-approval indication was withdrawn in the U.S.
06—Continue