10-QPeriod: Q1 FY2010

BRISTOL MYERS SQUIBB CO Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 29, 2010For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) reported its first-quarter 2010 financial results, showing a robust increase in net sales and earnings compared to the same period in 2009. Net sales grew by 11% to $4.81 billion, driven by strong performance in key products like PLAVIX and the virology portfolio, along with new launches. Net earnings from continuing operations attributable to Bristol-Myers Squibb Company increased by 14% to $743 million, resulting in diluted earnings per share of $0.43, up from $0.32 in the prior year. The company also highlighted progress in its strategic initiatives, including collaborations and pipeline development, while managing the impact of healthcare reform. Operationally, the company saw significant contributions from its BioPharmaceuticals segment, which reported a 15% increase in segment income. Despite the overall positive results, the company is navigating challenges such as increased Medicaid rebates due to healthcare reform, which impacted net sales by $49 million in the quarter. The company reaffirmed its commitment to financial strength and strategic growth, supported by a healthy cash position of $5.14 billion.

Financial Highlights

56 data points
Beta

Revenue

$4.81B

72.8% Gross Margin

Net Income

$743.00M

15.5% Net Margin

EPS (Diluted)

$0.43

Total Assets

$30.75B

Cash & Equivalents

$5.13B

Free Cash Flow

$335.00M

Financial Statements
Beta
Revenue$4.81B
Cost of Revenue$1.31B
Gross Profit$3.50B
R&D Expenses$910.00M
SG&A Expenses$900.00M
Operating Expenses$3.35B
Operating Income$743.00M
Interest Expense$33.00M
Net Income$743.00M
EPS (Basic)$0.43
EPS (Diluted)$0.43
Shares Outstanding (Basic)1.72B
Shares Outstanding (Diluted)1.73B

Key Highlights

  • 1Net sales increased 11% to $4.81 billion, driven by strong performance in PLAVIX, virology products (BARACLUDE, REYATAZ, SUSTIVA Franchise), and oncology drugs (ORENCIA, SPRYCEL).
  • 2Net earnings from continuing operations attributable to BMS grew 14% to $743 million, with diluted EPS rising to $0.43 from $0.32 in the prior year.
  • 3BioPharmaceuticals segment income increased by 15% to $1.23 billion, reflecting improved operating performance.
  • 4The company reported a significant increase in cash and cash equivalents, reaching $5.14 billion, despite a net cash outflow from financing activities.
  • 5Productivity Transformation Initiative (PTI) is on track to deliver significant cost savings, contributing to operational efficiency.
  • 6The company is actively managing the impact of U.S. healthcare reform, which included a $49 million reduction in net sales in the quarter.
  • 7Key pipeline developments were noted, including the FDA's acceptance of the NDA for ONGLYZA (saxagliptin) plus metformin and a positive advisory committee vote for belatacept.

Frequently Asked Questions

The 11% increase in net sales to $4.81 billion was primarily driven by strong performance in key products such as PLAVIX (up 16% worldwide), BARACLUDE (up 42%), REYATAZ (up 16%), and the SUSTIVA Franchise (up 15%). Growth was also supported by new launches like ONGLYZA and continued expansion of SPRYCEL and ORENCIA. Favorable foreign exchange rates also contributed 3% to the net sales growth.

The U.S. healthcare reform legislation, enacted in March 2010, had a notable impact. Higher Medicaid rebates, retroactive to January 1, 2010, and extended rebates to Medicaid managed care plans reduced net sales by $49 million and pre-tax income by $42 million in the first quarter. Additionally, the company recognized a $21 million tax charge due to the non-deductibility of a portion of retiree healthcare costs.

For PLAVIX, the company is vigorously defending its patent rights against generic challenges, though loss of market exclusivity could be material. The company reported ongoing patent litigation in the U.S. and internationally, with the outcome and timing of generic competition uncertain. For ABILIFY, worldwide sales grew 5%, but U.S. sales decreased 2% due to a reduced contractual share of revenue (from 65% to 58% starting January 1, 2010) and amortization of an extension payment. The company continues to advance its late-stage pipeline and optimize its established brands.

The company reported a strong net cash position of $3.48 billion as of March 31, 2010, with cash, cash equivalents, and marketable securities totaling $9.77 billion. Operating activities generated $464 million in cash. The company has a $2 billion revolving credit facility and expects its cash flow from operations, existing cash reserves, and capital markets access to be sufficient for its working capital, capital expenditures, strategic alliances, acquisitions, and dividend payments. The company does not anticipate a material impact on liquidity or financial flexibility from the current global economic downturn.