Bristol-Myers Squibb second-quarter net sales increase 2% to $4.8 billion

Bristol-Myers Squibb Company (NYSE: BMY) today reported results for the second quarter of 2010 which featured data on key marketed and investigational compounds in its oncology, diabetes and cardiovascular franchises, and growth in sales and EPS. The company also confirmed guidance for 2010 and minimum guidance for non-GAAP EPS in 2013.

"Our second quarter performance continues to strengthen our confidence in our ability to execute the key elements of our differentiated and focused BioPharma strategy. I am pleased with the progress we are making with our pipeline as it is one of the most important drivers of the long term success of our strategy," said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb.

"We delivered both sales and EPS growth in the quarter, and presented encouraging clinical data from across our portfolio of products. We completed filings in Europe and the U.S. for SPRYCEL^® for first-line treatment of chronic myeloid leukemia, and in Europe for ipilimumab. We announced the commencement of a $3 billion share repurchase program, reflecting our strong cash position and demonstrating our commitment to increasing shareholder value," Andreotti said.

SECOND QUARTER FINANCIAL RESULTS

• Bristol-Myers Squibb posted second quarter 2010 net sales of $4.8 billion, an increase of 2% compared to the same period in 2009. U.S. Health care reform had a 1.5% negative effect on net sales in the second quarter.
• U.S. net sales increased 4% to $3.1 billion in the second quarter of 2010 compared to the same period in 2009. International net sales decreased 2%, or 3% excluding foreign exchange impact, to $1.7 billion.
• Gross margin as a percentage of net sales was 73.2% in the second quarter 2010 compared to 73.7% in the same period in 2009.
• Marketing, selling and administrative expenses decreased 3% to $894 million in the second quarter of 2010.
• Advertising and product promotion spending decreased by 12% to $263 million in the second quarter of 2010.
• Research and development expenses increased 1% to $822 million in the second quarter of 2010.
• The effective tax rate on earnings from continuing operations before income taxes was 20.4% in the second quarter of 2010, compared to 23.2% in the same period in 2009. The current quarter included a $59 million tax benefit related to an out-of-period adjustment for previously unrecognized deferred tax assets as of December 31, 2009.
• The Company reported second quarter GAAP net earnings from continuing operations of $927 million, or $0.53 per share, compared to $880 million, or $0.44 per share, for the same period in 2009.
• The Company reported second quarter non-GAAP net earnings from continuing operations of $944 million or, $0.54 per share, compared to $966 million, or $0.48 per share, for the same period in 2009. An overview of specified items is discussed under the "Use of Non-GAAP Financial Information" section.
• The impact of U.S. health care reform decreased second quarter EPS from continuing operations by approximately $0.02 on both a GAAP and non-GAAP basis.
• Cash, cash equivalents and marketable securities were $10.2 billion, resulting in a net cash position of $3.7 billion as of June 30, 2010.

SECOND QUARTER PRODUCT AND PIPELINE UPDATE

• Bristol-Myers Squibb's global sales growth in the second quarter was led by the Company's virology franchise and by PLAVIX^®. Sales of BARACLUDE^® rose 25%, REYATAZ^® rose 8%, SUSTIVA^® rose 6% and PLAVIX rose 6%. Second quarter sales of ORENCIA^® and SPRYCEL grew 20% and 23% respectively compared to the same period in 2009.
• At the American Society of Clinical Oncology meeting in June, data were presented on 13 of the Company's oncology compounds, including:
  • Positive results from a Phase III randomized double blind study of ipilimumab which demonstrated that overall survival was significantly extended in patients with previously-treated metastatic melanoma who received ipilimumab. The results were statistically significant for patients receiving ipilimumab alone or ipilimumab in combination with a gp100 peptide vaccine when compared to those patients who received the control therapy of gp100 alone. The results were published in the New England Journal of Medicine.
  • Positive results from a randomized Phase II study evaluating ipilimumab in combination with standard chemotherapy in previously untreated patients with advanced non-small cell lung cancer.
  • Phase III study results that demonstrated SPRYCEL 100 mg once daily achieved a superior rate of confirmed complete cytogenetic response compared to GLEEVEC^®* as a first-line treatment for patients with chronic phase chronic myeloid leukemia (CML). These results were published in the New England Journal of Medicine. SPRYCEL is being developed in collaboration with Otsuka Pharmaceutical Co.

• In May, the Marketing Authorization Application (MAA) for ipilimumab for metastatic melanoma in pre-treated patients was validated by the European Medicines Agency.
• In April, the Type II Variation submission for SPRYCEL for the treatment of adult patients with newly diagnosed CML in chronic phase was validated by the European Medicines Agency. In July, U.S. Food and Drug Administration (FDA) accepted for priority review the sNDA for SPRYCEL for the treatment of adult patients with newly diagnosed CML in chronic phase. The Prescription Drug User Fee Act (PDUFA) date—the date by which action from the FDA is expected—is October 28, 2010.
• At the American Diabetes Association Annual Scientific Sessions in June:
  • Results from a 76-week Phase III study of ONGLYZA™ as initial combination therapy with metformin were presented. Also presented were results from a 52-week Phase IIIb study in adults with type 2 diabetes who had inadequate glycemic control on metformin therapy plus diet and exercise. This study found that the addition of ONGLYZA 5 mg to existing metformin therapy achieved the primary objective of demonstrating non-inferiority compared to the addition of titrated glipizide, a sulphonylurea, to existing metformin therapy in reducing HbA1c levels. Additionally, the study found that treatment with ONGLYZA 5 mg plus metformin resulted in both statistically significant fewer patients reporting hypoglycemic events and statistically significant weight loss. ONGLYZA is being developed in collaboration with AstraZeneca.
  • Dapagliflozin is progressing in Phase III development with a novel mechanism for the treatment of type 2 diabetes that potentially offers a triad of benefits: glucose control, weight loss and improvements in blood pressure. Positive results were presented from a 24-week Phase III clinical study in inadequately controlled type 2 diabetes patients who were treated with insulin plus dapagliflozin. Dapagliflozin is being developed in collaboration with AstraZeneca.
• In June, Bristol-Myers Squibb and Pfizer, Inc. announced that the Phase III AVERROES clinical trial of apixaban in patients with atrial fibrillation is closing early due to clear evidence of efficacy. An interim analysis by the Independent Data Monitoring Committee showed a clinically important reduction in stroke and systematic embolism in patients with atrial fibrillation considered intolerant of or unsuitable for warfarin therapy who received apixaban as compared to aspirin. This interim analysis also demonstrated an acceptable safety profile for apixaban compared to aspirin.
• In July, Bristol-Myers Squibb announced that the European Commission approved a new indication for ORENCIA in combination with methotrexate, for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately to previous therapy with one or more disease-modifying anti-rheumatic drugs including methotrexate or a TNF-alpha inhibitor.
• In May, the FDA issued a complete response letter regarding the Biologics License Application for belatacept in kidney transplant. We are working with the FDA to provide the requested data as soon as they are available and we expect to be able to provide a submission to the FDA by the fourth quarter.
• In June, Bristol-Myers Squibb terminated its development collaboration with Exelixis Inc. on the experimental cancer drug XL184. All rights to XL184 were returned to Exelixis.

FINANCIAL GUIDANCE

2010

• The Company reaffirms its 2010 GAAP EPS guidance range of $1.84 to $1.94 per share and its non-GAAP guidance range of $2.10 to $2.20 per share. Key 2010 guidance assumptions include: mid-single digit revenue growth; full-year gross margin being consistent with last year; advertising and promotion expense decrease in the high-single digit range; marketing, sales and administrative expenses remaining flat; research and development expense growth in the mid- to high-single-digit range; and an effective tax rate of between 23% and 24%.

2013

• The Company reaffirms its minimum non-GAAP EPS guidance of $1.95 for 2013. This 2013 guidance assumes strong underlying revenue trends for certain key products, timely regulatory approval of and significant contributions from pipeline products, continued and additional productivity savings, exclusivity for ABILIFY^® for the term of the current agreement with Otsuka Pharmaceutical Co., Ltd., and that the negative impact of U.S. health care reform and European government-mandated cost containment measures is not substantially different from current expectations.

The financial guidance for 2010 and the 2013 minimum non-GAAP EPS guidance exclude the impact of any potential future strategic transactions and specified items that have not yet been identified and quantified. The non-GAAP 2010 guidance and the 2013 minimum guidance also exclude other specified items such as gains or losses from sale of businesses and product lines; from sale of equity investments and from discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for licensing arrangements; and debt retirement costs.