10-QPeriod: Q1 FY2017

BRISTOL MYERS SQUIBB CO Quarterly Report for Q1 Ended Mar 31, 2017

Filed April 27, 2017For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squbb Co. (BMY) reported a strong first quarter for 2017, with total revenues increasing by 12% year-over-year to $4.93 billion. This growth was primarily driven by robust performance in their prioritized brands, Opdivo and Eliquis, which saw significant increases in sales. Net earnings attributable to BMS rose to $1.57 billion, translating to a diluted EPS of $0.94, up from $0.71 in the prior year quarter. The company's operational cash flow improved substantially, turning positive at $861 million compared to a use of cash in the prior year, bolstered by lower income tax payments and a significant litigation settlement related to Keytruda. Key strategic initiatives for the quarter included expanding the collaboration with CytomX for novel therapies and agreeing to out-license compounds to Biogen and Roche, generating substantial upfront payments. The company also continued its disciplined capital allocation, executing accelerated share repurchases totaling $2 billion, funded by a combination of debt and cash. Despite facing ongoing litigation and potential generic competition for established brands, BMY demonstrated solid top-line growth and improved profitability, positioning itself for continued strategic development in its core therapeutic areas.

Financial Statements
Beta
Revenue$4.93B
Cost of Revenue$1.26B
Gross Profit$3.66B
R&D Expenses$1.30B
SG&A Expenses$1.08B
Operating Expenses$2.97B
Interest Expense$45.00M
Net Income$1.57B
EPS (Basic)$0.95
EPS (Diluted)$0.94
Shares Outstanding (Basic)1.66B
Shares Outstanding (Diluted)1.67B

Key Highlights

  • 1Total Revenues increased 12% year-over-year to $4.93 billion, driven by strong performance of prioritized brands Opdivo and Eliquis.
  • 2Net Earnings Attributable to BMS grew to $1.57 billion, resulting in a Diluted EPS of $0.94, an increase from $0.71 in the prior year period.
  • 3Operating cash flow turned positive, reaching $861 million, a significant improvement from a negative $228 million in Q1 2016.
  • 4The company announced strategic collaborations, including expanding the partnership with CytomX and out-licensing agreements with Biogen and Roche, generating substantial upfront payments.
  • 5BMY executed accelerated share repurchases totaling $2 billion, demonstrating a commitment to returning capital to shareholders.
  • 6Despite challenges with established brands like the Hepatitis C Franchise seeing a 62% revenue decline, the growth in key products offset these impacts.
  • 7Significant one-time events influenced results, including a $481 million payment received from Merck related to a patent litigation settlement for Keytruda.

Frequently Asked Questions

The primary drivers of revenue growth were the strong performance of prioritized brands, particularly Opdivo and Eliquis, which saw significant sales increases. This growth was partially offset by declines in established brands, such as the Hepatitis C Franchise.

Bristol-Myers Squibb showed a substantial improvement in its cash flow from operating activities, which was positive $861 million in Q1 2017, a significant turnaround from a negative $228 million in Q1 2016. This improvement was largely due to lower income tax payments and proceeds from a litigation settlement.

During Q1 2017, BMY expanded its strategic collaboration with CytomX for novel therapies and entered into agreements to out-license compounds to Biogen (BMS-986168) and Roche (BMS-986089), which are expected to generate substantial upfront payments and potential future royalties.

BMY continued its disciplined approach to capital allocation. In February 2017, the company executed accelerated share repurchase agreements totaling $2 billion to repurchase common stock, funded by a combination of new debt issuance and existing cash. Dividend payments also continued, with declared dividends per common share of $0.39.