Analyst Conference Summary

biotechnology

Bristol-Myers Squibb
BMY

conference date: October 26, 2022 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2022 (third quarter 2022, Q3)


Forward-looking statements

Overview: Earnings growth y/y, but revenue decline unless adjusted for foreign exchange rates.

Basic data (GAAP):

Revenue was $11.22 billion, down 6% sequentially from $11.89 billion and down 3% from $11.62 billion year-earlier.

Net income was $1.61 billion, up 13% sequentially from $1.42 billion and up 4% from $1.55 billion year-earlier.

EPS (earnings per share), diluted were $0.75, up 14% sequentially from $0.66, and up 9% from $0.69 year-earlier.

Guidance:

Now expects full year 2022 diluted GAAP EPS $2.54 to $2.84; non-GAAP EPS $7.44 to $7.74.

Conference Highlights:

Giovanni Caforio, M.D., CEO of Bristol-Myers Squibb stated "Our teams continue to progress our pipeline and achieve significant regulatory and clinical milestones, including the approval of Sotyktu, a first-in-class, TYK2 inhibitor, to treat moderate to severe plaque psoriasis. Our nine new product launches over the last three years including three first-in-class launches this year, combined with progress in our robust and diverse product pipeline, have built a strong foundation for our company. Combined with our financial strength and talented employees, Bristol Myers Squibb is well positioned for growth and to advance new medicines for patients." The three first-in-class products approved this year, Opdaulag, Camzyos, and Sotyktu, have estimated annual sales of $4 billion by 2029, which should help as older drug sales fall off. Still committed to growing the dividend.

in Q3 2022 completed the acquisition of Turning Point Therapeutics, a leading precision oncology company. Plans to launch repotrectinib, an ROS1/NTRK inhibitor for NSCLC in 2H 2023.

In Q3 the FDA approved Sotyktu (Deucravacitinib), a first-in-class TYK2 inhibitor ofr adults with moderate to severe plaque psoriasis. Japan also accepted an NDA for deucravacitinib for the treatment of adults with moderate to severe plaque psoriasis, pustular psoriasis and erythrodermic psoriasis.

For Q3 both GAAP and non-GAAP EPS benefited $0.02 per share from in-process R&D charges and milestone payments.

In Q3 2022 the FDA has accepted a supplemental new drug application for Camzyos (mavacamten) for an expanded indication for the treatment of adults with symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy and assigned a PDUFA goal date of June 16, 2023. Camzyos for symptomatic obstructive hypertrophic cardiomyopathy was approved by the FDA in April 2022.

In Q3 2022 milvexian in secondary stroke prevention had positive Phase 2 data, a 30% reduction of strokes. Phase 3 trial to start by year-end.

In Q3 2022 The European Commission (EC) approved the fixed-dose combination of Opdualag for the first-line treatment of advanced melanoma in adults and adolescents over 12 years of age with tumor cell PD-L1 expression.

In Q3 2022 Phase 3 CheckMate -76K trial evaluating Opdivo as a single agent in the adjuvant setting in patients with completely resected stage IIB/C melanoma met its primary endpoint and demonstrated a statistically significant and clinically meaningful benefit in recurrence-free survival at a pre-specified interim analysis. But the Phase 3 CheckMate –914 trial, evaluating Opdivo plus Yervoy as an adjuvant treatment for patients with localized renal cell carcinoma who have undergone full or partial removal of the kidney and who are at moderate or high risk of relapse, did not meet the primary endpoint.

In Q3 2022 got positive topline results from the Phase 3 KarMMa-3 trial showed treatment with Abecma compared to standard combination regimens in adults with relapsed and refractory multiple myeloma after 2 to 4 prior lines of therapy met its primary endpoint of statistically significant improvement in progression-free survival. It also showed an improvement in the secondary endpoint of overall response rate compared. The trial was conducted with 2seventy bio (TSVT).

Beginning with the first quarter of 2022, significant R&D charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights are no longer excluded from non-GAAP results.

Non-GAAP numbers: diluted EPS $1.99, up 3% sequentially from $1.93 and up 3% from $1.93 year-earlier. Net income $4.26 billion, up 4% sequentially from $4.15 billion, and flat from $4.3 billion year-earlier.

Cash and equivalents ended at $9.02 billion down sequentially from $13.2 billion. Cash flow from operations $3.7 billion. Long-term debt was $39.1 billion (avg rate 3.4%). $0 billion used for stock repurchases, but $9.5 billion remains authorized. Paid down $2.8 billion of debt in Q3.

Therapy
sales in $ millions
Q3 2022
sales
Q2 2022
sales
Q3 2021
sales
y/y change
Revlimid $2,420 $2,501 $3,347 -28%
Opdivo 2.047 2,063 1,905 7%
Eliquis 2,655 3,235 2,413 10%
Orencia 833 876 870 1%
Pomalyst/Imnovid 886 908 851 4%
Sprycel 560 544 551 2%
Yervoy 523 525 515 2%
Abraxane 177 241 266 -33%
Empliciti 73 77 82 -11%
Reblozyl 190 172 160 19%
Inrebic 21 23 22 -5%
Zeposia 69 66 40 73%
Onureg 32 32 21 52%
Breyanzi 44 39 30 47%
Abecma 107 89 71 51%
Opdualag 84 58 0 na
Camzyos 5 3 0 na
Sotyktu 1 0 0 na%
Other 441 435 480 -8%
Total 11,218 11,887 11,624 3%

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 $2.35 billion. SG&A $1.93 billion. R&D $2.42 billion. Amortization $2.42 billion. Acquired IPRD $30 million. Other income $140 million. Total expenses $9.01 billion. Operating profit $2.21 billion. Taxes $601 million.

Q&A selective summary:

Sotyktu label, target population, reimbursement? Launch going very well. Most use is in community setting, about 80% of the volume for this indication is in the community setting. Focus is on initial first-line starts plus Otezla failures or for more efficacy. Working on better access for 2023, should be set in 2024.

Eliquis pricing? Discounts are based on product mix, no full year change.

Ulcerative colitis landscape? Zeposia is seeing demand growth, mostly for UC. In MS market share remains stable. UC is a very competitive market, but Rinvoq is hurting others, not Zeposia.

Camzyos launch, when might accelerate? Pleased with launch, is accelerating now, now have over 2,000 certified physicians. 1,100 patients prescribed by end of quarter, increasing week over week. Infrastructure for the product is also improving.

Onureg barriers? Mainly intensive chemotherapy use is going down, O is for maintenance after that. Just beginning to see launches ex-US.

Multiple myeloma dynamics? The disease remains uncured, so better and safer therapies are still needed. Cell therapies have the chance to be long-lasting. Bispecific approval could help, but still room for more innovation. Our own t-cell engager data will be presented at ASH this year. Combinationa approaches may also be highly effective.

Milvexian timeline? Negotiating with regulators for trial design, with Jansen, Phase 3 should start in the next few months.

Discussed the midstage pipeline including potential readouts in 2023.

Revlimid, overall growth in BMY revenue in 2023? For the full year expects Revlimid revenue approaching $9.5 billion. Our projection is $2.5 billion of decline per year for Revlimid. But will vary by quarter as generics enter the market. Believes will be able to grow the business as a whole in 2023, excluding foreign currency exchange effects. Will give 2023 guidance on the Q4 results call.

Interest expense is declining as we pay down debt, interest on our cash balance is increasing.

Camzyos sales in Q4 in $10 million range? No specific guidance, but happy with conversions to commercial drugs. Patients are typically on free drug for seven to eight weeks at this time, but that period should come down.

NYK224 will be compared to Camzymos to see which indications we might pursue with it.

BCMA CAR-T space, Abecma in? We will have proof of concept for the longer follow up at ASH. We will initiate a trial at an earlier setting. We believe Abecma remains a very differentiated asset showing superiority to standard of care.

Reblozyl duration of therapy will be driven by dose titration. Need a larger % of patients to do this. We also want to decrease the time patients are on ESAs.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2022 William P. Meyers