Analyst Conference Summary

biotechnology

conference date: April 25, 2024 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2024 (first quarter 2024, Q1)

Forward-looking statements

Overview: Solid revenue growth, negative EPS from one-time IPRD charges.

Basic data (GAAP):

Revenue was $11.9 billion, up 4% sequentially from $11.48 billion and up 5% from $11.3 billion year-earlier.

Net income was negative $11.9 billion, down sequentially from $1.8 billion and down from $2.3 billion year-earlier.

EPS (earnings per share), diluted were negative $5.89, sequentially from $0.87, and down from $1.07 year-earlier.

Guidance:

Updated to include recent transactions. 224 Non-GAAP EPS reduced from $7.10 to $7.40 to $0.40 to $0.70. The acquired IRPD impact was $6.630. No change in predicted revenue of low to single-digit increase.

Conference Highlights:

Chris Boerner, CEO, said "We had a good start to 2024, with revenue growth, important advances in our pipeline and the closure of several strategically important transactions. Our focus remains on strengthening the company's long-term growth profile. As a part of our continued evolution, we're executing a strategic productivity initiative that will allow us to be more agile, drive efficiency across the company, and prioritize investing in opportunities where we see the greatest potential to get the most promising medicines to patients as quickly as possible." Bristol is rapidly transitioning to its growth portfolio from its legacy portfolio. Plans to pay down $10 billion of debt over the next 2 years. Focusing R&D on higher ROI programs. FX had a negative effect in Q1; excluding it, revenue was up 6%.

The Aquired IPRD (in process research and development) expense in the quarter of $12.9 billion was mainly due to the Karuna asset acquisition and the Systimmune collaboration.

Mirati Therapeutics for $4.8 billion acquisition closed on January 23, 2024. Also complete acquisitions of Systimmune, Karuna Therapeutics and RayzeBio in Q1 2024.

In March, 2024 Bristol announced the dividend would be $0.60 per share, payable May 1, 2024 to shareholders or record on April 5, 2024.

In Q1 Abecma was approved for earlier lines of therapy in multiple myeloma. Believes that Abecma revenue can be returned to growth over time. In Q1 saw demand growth but pricing pressure.

Believes KarXT, a first-in-classs M1/M4 agonist for schizophrenia, has a very significant market opportunity. PDUFA is September 26, 2024

Revlimid had an increased volume of generic competition starting in March 2024.

Bristol plans to discontinue some development programs that do not offer good ROI.

Non-GAAP numbers: diluted EPS negative $4.40, sequentially from $1.70 and down from $2.05 year-earlier due to $6.30 in IPRD charge. Net income negative $8.9 billion, down sequentially from $3.5 billion, and down from $4.3 billion year-earlier.

Cash and equivalents ended at $10.0 billion down sequentially from $12.64 billion. Cash flow from operations $na billion. Long-term debt was $49.5 billion. $0 billion used for stock repurchases, and $5 billion remains authorized.

The mid to late stage pipeline includes repotrectinib, farletuzumab exteribulin, AR-LDD, iberomide, mezigdomide, alnuctamab BCMA TCE, CC-99282, cendakimab, LPA1, and milvexian.

Cost of products sold was $2.92 billion. SG&A $2.37 billion. R&D $2.70 billion. Amortization $2.36 billion. Acquired IPRD $12.9 billion. Other expense $81 million. Total expenses $23.4 billion. Operating loss $11.5 billion. Tax $392 million.

Q&A selective summary:

Cost savings, legacy Bristol vs. acquisitions? Mostly legacy: tightening portfolio; agility (layoffs); third-party relationships.

Trough level of earnings, timing of return to growth? We need to be judicious about long-term guidance. IRA impact on Eliquis is a factor, will know later in 2024. Will see that impact in 2026, will return to growth late in decade.

We see multiple growth opportunities from our new acquisitions, but that can involve increased investment in research and in sales.

Cancelling second-generation CTLA4 program, as data not significantly better than Yervoy. Similar decisions made on other pipeline programs. Wants to be best in class in continuing programs.

IRA more? Outcome likely in September. No impact in 2024, but in 2025 will see Part D benefit redesign effects.

Opdualag + chemo did better than Optivo + chemo in a subset of patients, so starting a Phase 3 trial later in the year. Data to be reported.

Expects to double Sutyktu prescriptions this year. This is a highly compeitive market, hopes to become the oral standard of care.

$13 billion with 5.3% interest rate will have a negative impact on other income going forward.

Believes negative IRA impact will be compensated for by the growth part of the portfolio. Revlimid will drop $1 to $1.2 billion this year, then again next year. Remember the LOE for Eliquis is in 2028, so the price issue is temporal.

Most of our planned savings come through this year, will be annualized fully in 2025. 90% of the actions are being taken this quarter.

KarXT rollout plans? Very important, first innovative schiz drug in decades. Will be ready to launch well in advance of the PDUFA date. Will be mostly Medicaid and Medicare patients. Feedback so far is positive. Main ramp will be in 2025.

We are very excited about radiopharmaceuticals as a platform. Integration is going well. In Phase 3, designing trials for other indications, with another IND filing likely late this year. RayzeBio will be an IND engine.

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