Summary
Bristol-Myers Squibb Company (BMY) reported stable net sales for the third quarter of 2010 compared to the prior year, with a 4% increase for the first nine months of 2010. The company experienced growth in key products like PLAVIX® and BARACLUDE®, but this was offset by decreases in mature brands and the impact of U.S. healthcare reform. Net earnings from continuing operations attributable to BMS saw a 6% increase for the quarter and an 8% increase for the nine-month period, driven partly by a lower effective tax rate and a reduction in outstanding shares following the Mead Johnson split-off. The company continues to focus on building a foundation for future growth amidst the upcoming loss of exclusivity for its largest product, PLAVIX®, in November 2011.
Financial Highlights
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Financial Statements
Beta
| Revenue | $4.80B |
| Cost of Revenue | $1.28B |
| Gross Profit | $3.52B |
| R&D Expenses | $824.00M |
| SG&A Expenses | $892.00M |
| Operating Expenses | $3.18B |
| Operating Income | $949.00M |
| Interest Expense | $38.00M |
| Net Income | $949.00M |
| EPS (Basic) | $0.55 |
| EPS (Diluted) | $0.55 |
| Shares Outstanding (Basic) | 1.71B |
| Shares Outstanding (Diluted) | 1.73B |
Key Highlights
- 1Net sales remained largely flat for Q3 2010 ($4.8 billion vs. $4.79 billion in Q3 2009) but increased by 4% year-to-date ($14.37 billion vs. $13.78 billion in YTD 2009).
- 2Net earnings from continuing operations attributable to BMS increased by 6% to $949 million for Q3 2010 and by 8% to $2.62 billion for the nine months ended September 30, 2010.
- 3Diluted EPS from continuing operations increased significantly, by 22% to $0.55 for Q3 2010 and by 25% to $1.51 for the nine-month period, partly due to a lower effective tax rate and a reduction in shares outstanding.
- 4The company is strategically managing its late-stage pipeline and has acquired ZymoGenetics, Inc. for approximately $885 million to bolster its biopharmaceutical portfolio.
- 5Significant legal proceedings continue, notably related to PLAVIX® patent infringement litigation and a $442 million damages award against Apotex (subject to appeal).
- 6The company received a warning letter from the FDA regarding its Manati, Puerto Rico manufacturing facility, which could impact the approval timeline for its NULOJIX® BLA.
- 7Cash, cash equivalents, and marketable securities totaled $10.9 billion at September 30, 2010, providing ample liquidity for operations, investments, and shareholder returns.
Frequently Asked Questions
Net sales were relatively flat for the third quarter of 2010 compared to the same period in 2009. Growth in key products like PLAVIX® (U.S.) and BARACLUDE® (international) was offset by decreased sales in mature brands, generic competition impacting international PLAVIX® sales, and the effects of U.S. healthcare reform. Year-to-date net sales showed a modest increase of 4%.
Net earnings from continuing operations attributable to Bristol-Myers Squibb Company increased by 6% to $949 million for the third quarter and by 8% to $2.62 billion for the nine months ended September 30, 2010. This improvement was supported by a lower effective income tax rate and a reduction in the number of outstanding shares following the Mead Johnson split-off.
The company faces ongoing litigation, particularly concerning PLAVIX® patent infringement, where a significant damages award was granted against Apotex. Additionally, a warning letter from the FDA concerning manufacturing practices at the Manati, Puerto Rico facility could delay the approval of NULOJIX®. The company is also impacted by U.S. healthcare reform, which is increasing rebate obligations.
Bristol-Myers Squibb maintained a strong financial position with $10.9 billion in cash, cash equivalents, and marketable securities as of September 30, 2010. The company expects its operating cash flows, existing liquidity, and potential capital markets access to be sufficient to cover operational needs, debt obligations, dividends, share repurchases, and strategic initiatives, including the recent acquisition of ZymoGenetics.