10-QPeriod: Q1 FY2016

BRISTOL MYERS SQUIBB CO Quarterly Report for Q1 Ended Mar 31, 2016

Filed April 28, 2016For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) reported first-quarter 2016 results showing a 9% increase in total revenues to $4.4 billion, driven by strong growth in key products like Opdivo and Eliquis, which offset declines in older or divested products such as Abilify and Erbitux. Net earnings remained relatively flat year-over-year at $1.2 billion, resulting in diluted Earnings Per Share (EPS) of $0.71. The company highlighted significant product approvals and pipeline advancements, particularly in immuno-oncology, and continued strategic business development, including the acquisition of Padlock Therapeutics. Despite increased R&D and marketing expenses, the company maintained a solid financial position, though cash flow from operations turned negative due to higher tax payments and timing of customer collections.

Financial Highlights

56 data points
Beta

Revenue

$4.39B

76.0% Gross Margin

Net Income

$1.20B

27.2% Net Margin

EPS (Diluted)

$0.71

Total Assets

$31.89B

Cash & Equivalents

$2.64B

Free Cash Flow

-$470.00M

Financial Statements
Beta
Revenue$4.39B
Cost of Revenue$1.05B
Gross Profit$3.34B
R&D Expenses$1.14B
SG&A Expenses$1.07B
Operating Expenses$2.74B
Interest Expense$43.00M
Net Income$1.20B
EPS (Basic)$0.72
EPS (Diluted)$0.71
Shares Outstanding (Basic)1.67B
Shares Outstanding (Diluted)1.68B

Key Highlights

  • 1Total revenues increased by 9% to $4.4 billion, primarily driven by strong performance from Opdivo and Eliquis.
  • 2Net earnings attributable to BMS were $1.2 billion, a slight increase from $1.19 billion in the prior year, with diluted EPS remaining stable at $0.71.
  • 3Significant product approvals were received for Opdivo in the EU for renal cell carcinoma and non-small cell lung cancer, and for the Hepatitis C Franchise (Daklinza) in the US and EU for additional patient populations.
  • 4The company completed the acquisition of Padlock Therapeutics in April 2016 to bolster its autoimmune disease pipeline.
  • 5Research and Development expenses increased by 12% to $1.1 billion, reflecting investments in Opdivo development and other pipeline programs.
  • 6Cash flow from operating activities was negative at ($386 million), a significant decrease from $626 million in the prior year, largely due to higher income tax payments and timing of customer collections.
  • 7The company repurchased common stock totaling $231 million during the quarter.

Frequently Asked Questions

Revenue growth was primarily driven by strong demand and increased sales of Opdivo (nivolumab) and Eliquis (apixaban), which saw significant year-over-year increases. Higher sales for Daklinza (part of the Hepatitis C Franchise) and Orencia also contributed positively. These increases helped offset declines from products like Abilify (due to patent expiry in the US) and Erbitux (transfer of rights).

Net earnings attributable to BMS were virtually flat, increasing slightly from $1.186 billion to $1.195 billion. Diluted Earnings Per Share (EPS) also remained stable at $0.71. While revenues increased, this was offset by higher expenses in Cost of Products Sold (partially due to profit sharing on Eliquis) and Research and Development, as well as a higher effective tax rate in the current year.

Cash flow from operations turned negative in the first quarter of 2016, totaling ($386 million), compared to positive $626 million in the prior year. This was primarily attributed to higher income tax payments and timing differences in customer collections, particularly related to newer products with potentially longer payment terms. Management believes its existing cash, cash equivalents, and marketable securities, combined with operational cash generation and commercial paper issuance, will be sufficient to meet its needs for the foreseeable future.

Key strategic developments included the acquisition of Padlock Therapeutics to enhance its autoimmune disease pipeline and significant product approvals for Opdivo and the Hepatitis C Franchise in major markets. The company also noted continued progress in its immuno-oncology leadership and disciplined capital allocation, including share repurchases and dividend payments.