10-QPeriod: Q3 FY2013

BRISTOL MYERS SQUIBB CO Quarterly Report for Q3 Ended Sep 30, 2013

Filed October 23, 2013For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb (BMY) reported a return to profitability in the third quarter of 2013, with net earnings of $692 million ($0.42 per diluted share), a significant improvement from a net loss of $711 million ($0.43 per diluted share) in the same period last year. This turnaround was driven by an 9% increase in net sales to $4.1 billion, largely due to growth in key products like Sprycel, Yervoy, and Orencia, partially offset by declining sales of established products such as Abilify and Plavix. For the first nine months of 2013, net earnings were $1.84 billion ($1.11 per diluted share), compared to $1.04 billion ($0.61 per diluted share) in the prior year. While overall net sales decreased by 11% year-to-date due to significant patent expirations in 2012 (Plavix and Avapro/Avalide), the company demonstrated effective cost management, with total expenses decreasing by 14% for the nine-month period. This financial performance, coupled with a strong pipeline and strategic alliances, positions BMY for continued recovery and future growth, though challenges from ongoing patent cliffs and evolving market dynamics remain.

Financial Highlights

57 data points
Beta

Revenue

$4.07B

71.1% Gross Margin

Net Income

$692.00M

17.0% Net Margin

EPS (Diluted)

$0.42

Total Assets

$36.80B

Cash & Equivalents

$1.77B

Free Cash Flow

$929.00M

Financial Statements
Beta
Revenue$4.07B
Cost of Revenue$1.18B
Gross Profit$2.89B
R&D Expenses$893.00M
SG&A Expenses$980.00M
Operating Expenses$3.25B
Interest Expense$46.00M
Net Income$692.00M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)1.65B
Shares Outstanding (Diluted)1.66B

Key Highlights

  • 1Net sales increased by 9% to $4.07 billion for the three months ended September 30, 2013, compared to $3.74 billion for the same period in 2012.
  • 2Net earnings for the third quarter of 2013 were $692 million, or $0.42 per diluted share, a significant turnaround from a net loss of $711 million, or $0.43 per diluted share, in the third quarter of 2012.
  • 3For the nine months ended September 30, 2013, net sales decreased by 11% to $11.94 billion, reflecting the impact of patent expirations on key products like Plavix and Avapro/Avalide.
  • 4Total expenses decreased by 14% for the nine months ended September 30, 2013, indicating effective cost management.
  • 5Key products showing strong growth include Sprycel (up 20% Q3 YoY), Yervoy (up 33% Q3 YoY), and Orencia (up 22% Q3 YoY).
  • 6Abilify sales decreased by 16% in the third quarter, primarily due to a reduction in BMY's contractual share of net sales.
  • 7The company continues to manage its significant collaborations, notably with Otsuka (Abilify, Sprycel) and AstraZeneca (diabetes alliance including Onglyza, Bydureon, Byetta, Forxiga), and Pfizer (Eliquis).

Frequently Asked Questions

The improvement was primarily driven by a 9% increase in net sales, reaching $4.07 billion, and a significant reduction in total expenses. The sales increase was fueled by strong performance in key products such as Sprycel, Yervoy, and Orencia, while the reduction in expenses, including the absence of a large impairment charge seen in the prior year, contributed to the profitability turnaround.

The loss of exclusivity for Plavix and Avapro/Avalide in 2012 significantly impacted net sales, which decreased by 11% for the first nine months of 2013 compared to the prior year. This resulted in lower operating cash flow and net income. However, the company has managed this impact through cost control measures and by focusing on growth in newer products and its pipeline.

BMY is focusing on growing its newer key marketed products, advancing its robust research and development pipeline, and managing costs. The company is also actively pursuing a 'string of pearls' licensing and acquisitions strategy to build relationships with innovative organizations. Key pipeline developments and marketed product updates for drugs like Yervoy, dapagliflozin, Onglyza, and Eliquis are highlighted as critical for future revenue and earnings.

As of September 30, 2013, Bristol-Myers Squibb had cash, cash equivalents, and marketable securities totaling $6.35 billion. The net debt position was negative $867 million, indicating a strong liquidity position. A significant portion of the cash is held in low-tax jurisdictions and is expected to be indefinitely reinvested offshore.