8-KOther EventsExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Corporate Update (Apr 16, 2015)

Filed April 16, 2015For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) has filed an 8-K report on April 16, 2015, to disclose a significant strategic agreement with Eli Lilly and Company. The core of this announcement is the transfer of all North American rights for the cancer drug Erbitux (cetuximab) from Bristol-Myers Squibb to Eli Lilly. This transaction is expected to result in a non-cash pre-tax charge between $150 million and $200 million for Bristol-Myers Squibb in 2015. While this charge is considered a specified item, the company anticipates that royalties received will be recognized as other income, and importantly, the deal is not expected to materially impact its non-GAAP earnings. Investors should note this shift in rights as it impacts the company's product portfolio and future revenue streams in the North American market.

Key Highlights

  • 1Bristol-Myers Squibb is transferring all North American rights of Erbitux (cetuximab) to Eli Lilly.
  • 2The transaction is structured as an agreement between the two companies.
  • 3A non-cash pre-tax charge of approximately $150 million to $200 million is anticipated for 2015.
  • 4This charge will be classified as a specified item.
  • 5Royalties generated from the transaction are expected to be recorded as other income.
  • 6The company expects no significant impact on its non-GAAP earnings.
  • 7A joint press release dated April 16, 2015, details this agreement and is filed as an exhibit.

Frequently Asked Questions

The main event is Bristol-Myers Squibb's agreement to transfer all North American rights for the drug Erbitux (cetuximab) to Eli Lilly and Company.

Bristol-Myers Squibb expects a non-cash pre-tax charge of $150 million to $200 million in 2015. However, the company states that the transaction is not expected to have a significant impact on its non-GAAP earnings.

Royalties are expected to be accounted for as other income.

Yes, transferring rights to a key drug like Erbitux in a major market like North America will alter the company's product portfolio and revenue generation strategy in that region.