10-QPeriod: Q2 FY2013

BRISTOL MYERS SQUIBB CO Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 25, 2013For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) reported a decrease in net sales for the second quarter of 2013 compared to the prior year, largely due to the loss of exclusivity for key products like Plavix* and Avapro*/Avalide*, which significantly impacted revenue. While overall net sales declined by 9% year-over-year for the quarter, the company saw growth in several key products, including Sprycel*, Yervoy, and Orencia*, indicating progress in diversifying its revenue streams. The company also launched Eliquis (apixaban) in multiple markets, a strategic move to bolster its cardiovascular portfolio. Despite the revenue headwinds from patent expirations, BMY demonstrated effective cost management, with total expenses remaining relatively flat year-over-year. This, combined with strategic portfolio management and pipeline advancements, resulted in a decrease in net earnings per share. The company's financial position remains solid, with a substantial cash and marketable securities balance, and a net debt position indicating healthy liquidity. Investors should monitor the performance of new product launches like Eliquis and ongoing pipeline developments for future growth drivers, while remaining aware of continued patent expirations and competitive pressures.

Financial Highlights

56 data points
Beta

Revenue

$4.05B

72.6% Gross Margin

Net Income

$536.00M

13.2% Net Margin

EPS (Diluted)

$0.32

Total Assets

$36.25B

Cash & Equivalents

$1.82B

Free Cash Flow

$1.41B

Financial Statements
Beta
Revenue$4.05B
Cost of Revenue$1.11B
Gross Profit$2.94B
R&D Expenses$951.00M
SG&A Expenses$1.04B
Operating Expenses$3.52B
Interest Expense$50.00M
Net Income$536.00M
EPS (Basic)$0.33
EPS (Diluted)$0.32
Shares Outstanding (Basic)1.64B
Shares Outstanding (Diluted)1.66B

Key Highlights

  • 1Net sales decreased by 9% to $4,048 million for the three months ended June 30, 2013, compared to $4,443 million in the prior year, primarily due to the loss of exclusivity for Plavix* and Avapro*/Avalide*.
  • 2Diluted Earnings Per Share (EPS) decreased to $0.32 for the quarter, down from $0.38 in the same period last year.
  • 3Key products like Sprycel* (dasatinib) and Yervoy (ipilimumab) showed significant year-over-year sales growth of 28% and 44% respectively in the quarter.
  • 4The launch of Eliquis (apixaban) in the US, Europe, Japan, and Canada began in Q1 2013, representing a key growth driver for the cardiovascular segment.
  • 5Research and development expenses remained high at $951 million for the quarter, underscoring the company's commitment to pipeline development.
  • 6Restructuring provisions increased significantly to $173 million for the quarter, primarily related to workforce reductions in Europe due to agreement restructurings and challenging market conditions.
  • 7Cash, cash equivalents, and marketable securities stood at $6,022 million as of June 30, 2013, providing ample liquidity.

Frequently Asked Questions

The primary reason for the decline in net sales is the loss of exclusivity for key products, notably Plavix* and Avapro*/Avalide*, which led to significant decreases in revenue from these products.

Several products are demonstrating strong growth, including Sprycel* (dasatinib) with a 28% increase in sales, Yervoy (ipilimumab) with a 44% increase, and Orencia (abatacept) with a 21% increase in the quarter. The recent launch of Eliquis (apixaban) is also expected to be a significant future revenue driver.

The company has managed its expenses by keeping total expenses relatively flat year-over-year. Cost of products sold decreased due to lower royalties, and while marketing, selling, and administrative expenses saw a slight increase, this was attributed to supporting new product launches and integration of acquisitions. Research and development expenses remained a significant investment.

Bristol-Myers Squibb maintains a solid financial position. As of June 30, 2013, the company had $6,022 million in cash, cash equivalents, and marketable securities. The net debt position was negative $1,184 million, indicating strong liquidity and financial flexibility.