Summary

• Bristol-Myers Squibb Company is a global biopharmaceutical company that develops and markets innovative medicines for various diseases, such as cancer, cardiovascular, immunologic, and fibrotic disorders.
• Bristol-Myers Squibb (BMY) was established in 1887 as Bristol-Myers Company and the company changed its name to Bristol-Myers Squibb in 1989.
• BMY operates in one segment that focuses on the discovery, development, licensing, manufacturing, marketing, distribution, and sale of biopharmaceutical products.
• The 52-week share price range is between $48.25 to $75.18, and the trailing PE is 12.59. As of 30 September 2023, the gross margin is 76.30%, the operating margin is 20.18%, and the net margin is 18.72%.
• The company's net revenues for the year ending 31 December 2022 were $46,159 million, a 0.49% decrease from the previous year's $46,385 million, resulting in a $226 million decrease.

Brief Company Overview

Bristol-Myers Squibb Company (NYSE: BMY) is a global biopharmaceutical company that develops and markets innovative medicines for various diseases, such as cancer, cardiovascular, immunologic, and fibrotic disorders. Some of its well-known products include Revlimid, Opdivo, Eliquis, and Yervoy. BMY also has some legacy brands, such as Droxia, Hydrea, and Glucovance. Bristol-Myers Squibb (BMY) was established in 1887 as Bristol-Myers Company after the merger of Clinton Pharmaceutical Company and William McLaren Bristol and John Ripley Myers’ drug manufacturing company. The company changed its name to Bristol-Myers Squibb in 1989 after acquiring Squibb Corporation, founded in 1858 by Edward Robinson Squibb. Its headquarters is actually located in Lawrence, New Jersey. The company also has several research and development sites around the world. BMY operates in one segment that focuses on the discovery, development, licensing, manufacturing, marketing, distribution, and sale of biopharmaceutical products. Its customers include healthcare professionals and providers, and it also provides information and education to consumers through direct-to-consumer advertising. The company's customers are mainly located in the U.S., accounting for 58% of its total revenue in 2022. BMY has a significant presence in Europe, Canada, Japan, and China, and its products are available in over 100 countries.

BMY, founded in 1858 by Edward Robinson Squibb, is a leading pharmaceutical company. In 1887, it merged with Clinton Pharmaceutical Company to form Bristol-Myers Company. In 1898, it introduced its first product, Sal Hepatica, followed by Ipana toothpaste in 1901. In 1989, it merged with Squibb Corporation to form Bristol-Myers Squibb. In 2020, BMY acquired Celgene, a biotechnology company specializing in cancer and inflammatory diseases, for $74 billion and RayzeBio, a radiopharmaceutical company focused on targeted cancer treatments, for $2.5 billion.

The current CEO of Bristol-Myers Squibb (BMY) is Chris Boerner, who succeeded Giovanni Caforio on November 1, 2023. According to its 2022 annual report, BMY had 34,300 employees worldwide. As of 31 December 2022, the company had 2,075 million shares outstanding. The company has 3,028 institutional shareholders, with Vanguard Group Inc. being the largest shareholder with 199,743,249 shares. As of 30 September 2023, for the nine months ended, the return on equity (ROE) and earnings per share (EPS) of BMY are 29.60% and $3.01, respectively. As of 30 September 2023, the company paid dividends amounting to $3,584 million. The 52-week share price range is between $48.25 to $75.18, and the trailing PE is 12.59. As of 30 September 2023, the gross margin is 76.30%, the operating margin is 20.18%, and the net margin is 18.72% for the nine months that ended.

Recent Developments

• On 23 January 2024, BMY completed the acquisition of Mirati Therapeutics, which will strengthen and diversify the Oncology portfolio.¹ 
• On 26 December 2023, Bristol Myers Squibb (NYSE: BMY) and RayzeBio, Inc. (NASDAQ: RYZB) entered a definitive merger agreement under which Bristol Myers Squibb will acquire RayzeBio for $62.50 per share in cash, for a total equity value of approximately $4.1 billion, or $3.6 billion net of estimated cash acquired.²
• On 22 December 2023, Bristol Myers Squibb (NYSE: BMY) and Karuna Therapeutics, Inc. (NASDAQ: KRTX) entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Karuna for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired.³
• On 11 December 2023, SystImmune, a clinical-stage biopharmaceutical company, and Bristol Myers Squibb (NYSE: BMY) entered an exclusive license and collaboration agreement for SystImmune’s BL-B01D1, a potentially first-in-class EGFRxHER3 bispecific antibody-drug conjugate (ADC) under which the companies will jointly develop and commercialize BL-B01D1 in the United States.⁴
• On 28 August 2023, the U.S. Food and Drug Administration (FDA) approved Reblozyl® (luspatercept-aamt) for the treatment of anemia without previous erythropoiesis-stimulating agent use (ESA-naïve) in adult patients with very low- to intermediate-risk myelodysplastic syndromes (MDS) who may require regular red blood cell (RBC) transfusions.⁵

Recent Financing Activities

• On 31 December 2022, for the year ended, stock options were exercised, and the company financed proceeds amounting to $984 million, which are utilized for stock-based payments.⁶
• On 31 December 2022, for the year ended, the company issued long-term debt amounting to $5,926 million to repurchase common stock and facilitate the acquisition and investing activities.⁷
• On 07 December 2023, the Board of Directors authorized the repurchase of an additional $3 billion of the company’s common stock under the company’s multi-year share repurchase program.⁸

Financial Performance Highlights

Q3 Performance Highlights

Net revenues for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, were $10,966 million, declined by 2% compared with the prior year's third quarter revenue, which amounted to $11,218 million. The net revenue declined by $252 million.  Gross Profit for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, was $8,460 million, declined by 5% compared with the prior year's third quarter gross profit, which amounted to $8,865 million, resulting in a decline in gross profit by $405 million.  Gross margin for the third quarter of the 2023-24 fiscal year,  as of 30 September 2023, was 77.15%, declined by 1.88% compared with the prior year's third quarter gross margin, which amounted to 79.02%, resulting in a deteriorated profitability.   Operating Profit for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, was $2,137 million, declined by 3% compared with the prior year's third quarter operating profit, which amounted to $2,209 million, resulting in a decline in operating profit by $72 million.

Operating margin for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, was 19.49%,  declined by 0.20% compared with the prior year's third quarter operating margin, which amounted to 19.69%. Net Profit for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, was $1,934 million, which increased by 20%  compared with the prior year's third quarter net profit, which amounted to $1,608 million, resulting in an increase in net profit by $326 million. Net margin for the third quarter of the 2023-24 fiscal year, as of 30 September 2023, was 17.64%, increased by 3.30% compared with the prior year's third quarter net margin, which amounted to 14.33%. Earnings Per Share (EPS) for the third quarter of the 2023-24 fiscal year, as of 30 September 2023,  was 0.94, an increase of 25% compared with the prior year's third quarter EPS, which amounted to 0.75, resulting in an increase in profitability from investment.  As of 30 September 2023, for the nine-month ended, the company paid dividends amounting to $3,584 million.

Revenue declined primarily as the U.S. revenues decreased 4% to $7,628 million in the quarter primarily due to lower sales of Revlimid resulting from generic erosion and an increase in the number of patients receiving free drug products for Revlimid and, to a lesser extent, Pomalyst, from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which BMS donates products. The new product portfolio and inline products partially offset this. At the same time, International revenues increased 2% to $3,153 million in the quarter. When adjusted for foreign exchange impacts, international revenues increased by 1%, primarily due to Opdivo and the new product portfolio, partially offset by lower average net selling prices. Gross profit and gross margin declined as the cost of products sold increased by $153 million in the third quarter of 2023 and $404 million year-to-date primarily due to lower hedging settlement gains ($143 million in the quarter and $147 million year-to-date) and higher royalty and profit sharing ($28 million in the quarter and $270 million year-to-date).

Annual Performance Highlights

Net revenues for the year ended on 31 December 2022 were $46,159 million, declined by 0.49%  compared with the prior year's revenue ended on 31 December 2021, which amounted to $46,385 million, resulting in a decrease in the net revenue by $226 million. The revenue declined as international revenues in 2022 decreased by 17% primarily due to lower demand for Revlimid as a result of generic erosion, foreign exchange, and lower average net selling prices, partially offset by In-Line Products and New Product Portfolio.  However, U.S. revenues in 2022 increased primarily due to Eliquis, New Product Portfolio, and Opdivo, partially offset by the Recent LOE Products. Average net selling prices increased by 4% in 2022 compared to the prior year.      

Gross Profit for the year ended on 31 December 2022 was $36,002 million, declined by 1% compared with the prior year's gross profit ended on 31 December 2021, which amounted to $36,445 million, resulting in a decline in the gross profit by $423 million. The Gross Margin for the year ended on 31 December 2022  was 78.04%, which declined by 0.53% compared with the prior year's gross margin that ended on 31 December 2021, which amounted to 78.57%, resulting in a decline in profitability. The gross profit and gross margin declined as the cost of products sold increased by $197 million primarily driven by product mix including higher profit sharing due to Eliquis revenue growth ($541 million), higher manufacturing startup costs, and inventory-related charges primarily from expanding the CAR-T cell therapy capabilities, partially offset by foreign exchange and related hedging settlements ($588 million) and impairment charges related to Inrebic EU regulatory approval milestones in 2021 ($315 million).

Operating Profit for the year ended on 31 December 2022 was $7,713 million, a decline of 5% compared with the prior year's operating profit ended on 31 December 2021, which amounted to $8,098 million,  resulting in a decline in the operating profit by $385 million. The Operating Margin for the year ended on 31 December 2022 was 16.71%, which declined by 0.75% compared with the prior year's operating margin that ended on 31 December 2021, which amounted to 17.46%, resulting in a decline in profitability.  Net Profit for the year ended on 31 December 2022 was $6,345 million,  declined by 10% compared with the prior year's net profit ended on 31 December 2021, which amounted to $7,014 million, resulting in a decrease in the net profit by $669 million. The Net Margin for the year ended on 31 December 2022 was 13.75%, which declined by 1.38% compared with the prior year's net margin that ended on 31 December 2021, which amounted to 15.12%,  resulting in a decline in profitability. Earnings Per Share (EPS) for the year ended on 31 December  2022 was $2.97, a decline of 6% compared with the prior year's EPS ended on 31 December  2021, which amounted to $3.15 resulting in a decline in the EPS by $0.18. Dividends for the year ended on 31 December  2022 were -$4,634 million, an increase of 5% compared with the prior year's dividends ended on 31 December  2021, which amounted to $4,396 million, resulting in an increase in the dividends by $238 million. BMY operates in one segment that focuses on the discovery, development, licensing, manufacturing, marketing, distribution, and sale of biopharmaceutical products.

There was a net cash inflow in operating activities amounting to $13,066 million in 2022 and a net cash inflow amounting to $16,207 million in 2021. The $3,141 million change in cash flow from operating activities compared to 2021 was driven by higher tax payments primarily resulting from research and development expenses that are capitalized and amortized for tax purposes. The net cash used in investing activities was $1,062 million and $538 million in 2022 and 2021, respectively. The $524 million change in cash flow from investing activities compared to 2021 was primarily due to the acquisition of Turning Point ($3,200 million, net of cash acquired) and lower proceeds from the sale of equity investments ($2,400 million). The net cash used in financing activities was $16,962 million in 2022, and the net cash used was $16,224 million in 2021.  The $738 million change in cash flow from financing activities compared to 2021 was primarily due to higher repurchases of common stock ($1,714 million), partially offset by changes in the amount of net debt borrowings ($871 million).

Business Overview

Bristol-Myers Squibb (BMY) is a global biopharmaceutical company that develops and markets innovative medicines for various diseases, such as cancer, cardiovascular, immunologic, and fibrotic disorders. BMY is one of the world's largest pharmaceutical companies and consistently ranks on the Fortune 500 list of the largest U.S. corporations. BMY’s products and medicines are available in more than 100 countries around the world. BMY’s customers include healthcare professionals and providers, such as doctors, nurse practitioners, physician assistants, pharmacists, technologists, hospitals, pharmacy benefit managers, and managed care organizations. BMY’s customers are mainly located in the U.S., which accounted for 58% of its total revenue in 2022. BMY also has a significant presence in Europe, Canada, Japan, China, and other international markets. The company focuses on discovering, developing, and delivering transformational medicines for patients facing serious diseases in the following core therapeutic areas:  oncology with a priority in certain tumor types; (ii) hematology with opportunities to broaden the franchise and sustain a leadership position in multiple myeloma; (iii) immunology with priorities in relapsing multiple sclerosis, psoriasis, psoriatic arthritis, lupus, RA and inflammatory bowel disease; (iv) cardiovascular disease (v) fibrotic disease with priorities in lung and liver, and (vi) neuroscience with a focus on neurodegenerative disease. BMY operates in one segment that focuses on the discovery, development, licensing, manufacturing, marketing, distribution, and sale of biopharmaceutical products.

Segmental Analysis (Biopharmaceutical Products)

As the key operating segment, BMY focuses on discovering, developing, and delivering transformational medicines for patients facing serious diseases in areas such as oncology, hematology, immunology, cardiovascular, and neuroscience. The company acquired MyoKardia in 2020 and Turning Point in 2022 with the purpose of becoming a leading biopharmaceutical company, expanding its precision oncology and cardiovascular portfolios with several near-term assets and additional external partnerships. Regarding Biopharmaceutical drug revenues, BMY was the world’s sixth-largest pharmaceutical company as of 2021.⁹ The key products of this segment include Eliquis®, Opdivo®, Pomalyst®/Imnovid®, Orencia®, Sprycel®, Yervoy®, Empliciti®, Reblozyl®, Abecma®, Opdualag®, Zeposia®, Breyanzi®, Onureg®, Inrebic®, Camzyos®, Sotyktu®, Revlimid® and  Abraxane®.

There have been significant developments in this business segment. In 2022, BMY obtained 18 approvals for new medicines and additional indications and formulations of currently marketed medicines in major markets (the U.S., EU, and Japan), including advancement in oncology through FDA and EC approval of Opdualag, the first PD-1 inhibitor and LAG-3 blocking antibody combination. Additionally, in the U.S., EU, and Japan, two Opdivo-based regimens as first-line treatments for unresectable advanced or metastatic ESCC were approved. BMY also continues to advance and invest in the cell therapy portfolio through the approval of Abecma in Japan for the treatment of multiple myeloma for patients with at least three prior therapies and approvals of Breyanzi for the relapsed or refractory diffuse large B-cell lymphoma, with second-line treatments in the U.S. and Japan, and third-line treatments in the EU. The approvals for Sotyktu (deucravacitinib) in the U.S. and Japan for the treatment of moderate to severe plaque psoriasis expanded the portfolio in immunology. Within cardiovascular, BMY broadened the New Product Portfolio with the FDA approval of Camzyos (mavacamten) for patients with symptomatic obstructive HCM. In 2023, BMY and RayzeBio, Inc. entered a definitive merger agreement under which Bristol Myers Squibb will acquire RayzeBio and BMY and Karuna Therapeutics, Inc. entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Karuna. All these developments indicate growth for the company.

Regarding recent performance, the third quarter of the 2023-24 fiscal year experienced a 2% decline in net revenues, with $10,966 million as of September 30, 2023. This was primarily due to lower Revlimid sales and increased patients receiving free drug products for Revlimid and Pomalyst from the Bristol Myers Squibb Patient Assistance Foundation. However, there was an increase in demand for In-Line Products and New Product Portfolio. The average U.S. net selling prices decreased 1% year-to-date compared to the same period a year ago. International revenues increased 3% during the third quarter, primarily due to Opdivo and New Product Portfolio and foreign exchange, partially offset by lower average net selling prices.

Other Information

Pharmaceutical products face increasing pressures due to market access, pricing controls, tax and importation laws, and restrictions in the U.S., EU, and other regions. These factors can lead to lower prices, lower reimbursement rates, and smaller populations for payers to reimburse. This can negatively impact the company's results of operations, operating cash flow, liquidity, and financial flexibility. In 2022, President Biden signed the IRA, which allows the government to negotiate prices for high-cost Medicare Part D and Part B drugs over nine or 13 years from FDA approval. Manufacturers will pay a rebate for these drugs when prices increase faster than inflation. The Medicare Part D redesign replaces coverage gap provisions and establishes a $2,000 cap for out-of-pocket limits costs for Medicare beneficiaries. Implementation is expected through regulatory authorities, with the outcome uncertain. Additionally, U.S. tax laws have been changed, including a 15% minimum tax for U.S. corporations on adjusted financial statement income and a non-deductible 1% excise tax provision on net stock repurchases. There is no typical effect on business performance from seasonality.

For distribution, the company sells its products primarily to wholesalers, specialty distributors, and specialty pharmacies, to a lesser extent to distributors, retailers, hospitals, clinics, and government agencies. Revlimid and Pomalyst are distributed in the United States through contracted pharmacies under the Lenalidomide Risk Evaluation and Mitigation Strategy (REMS) programs. Internationally, Revlimid and Imnovid are distributed under mandatory risk-management programs. Camzyos is only available through the Camzyos REMS Program, which is limited to REMS-certified pharmacies and must only be dispensed to authorized patients. These programs may vary by country and may be sold through hospitals or retail pharmacies.

The markets in which BMY competes are generally broad-based and highly competitive. It competes with other worldwide research-based drug companies, many smaller research companies with a more limited therapeutic focus and generic drug manufacturers. Important competitive factors include product efficacy, safety and ease of use, price, demonstrated cost-effectiveness, marketing effectiveness, product labeling, customer service, and R&D of new products and processes. The main competitors of Bristol-Myers Squibb include Zoetis (ZTS), Pfizer (PFE), AbbVie (ABBV), Merck & Co., Inc. (MRK), Johnson & Johnson (JNJ), Regeneron Pharmaceuticals (REGN), Vertex Pharmaceuticals (VRTX), GSK (GSK), Sanofi (SNY), and Takeda Pharmaceutical (TAK).

Company History

In 1858, Dr. Edward Robinson Squibb, a naval surgeon, established his own pharmaceutical laboratory in Brooklyn, New York, after being dissatisfied with the quality and purity of the drugs available at the time. In 1887, William McLaren Bristol and John Ripley Myers purchased the Clinton Pharmaceutical Company in Clinton, New York, and renamed it Bristol, Myers & Company. In 1898, Squibb Corporation introduced the first commercially available ether inhaler for anesthesia. In 1900, Bristol-Myers Company launched Sal Hepatica, a laxative mineral salt, and Ipana, the first toothpaste to contain a disinfectant. In 1924, Squibb Corporation became the first company to produce insulin in the United States, in collaboration with the University of Toronto. In 1941, Squibb Corporation developed penicillin, the first antibiotic, in partnership with the US government and other companies. In 1957, Bristol-Myers Company acquired Cheplin Biological Laboratories, a producer of antibiotics, vitamins, and vaccines. In 1960, Bristol-Myers Company introduced Bufferin, the first buffered aspirin, and Excedrin, the first extra-strength pain reliever. In 1972, Squibb Corporation launched Capoten, the first angiotensin-converting enzyme (ACE) inhibitor, for the treatment of hypertension and heart failure. In 1984, Bristol-Myers Company merges with Squibb Corporation, creating Bristol-Myers Squibb, one of the world’s largest pharmaceutical companies. In 1989, Bristol-Myers Squibb acquired Mead Johnson & Company, a leader in infant and child nutrition. In 1991, Bristol-Myers Squibb introduced Taxol, a breakthrough drug for the treatment of ovarian and breast cancer. In 1996, Bristol-Myers Squibb launched Zerit, the first once-daily antiretroviral drug for HIV/AIDS. In 2001, Bristol-Myers Squibb acquired DuPont Pharmaceuticals, expanding its portfolio of cardiovascular and oncology drugs. In 2007, Bristol-Myers Squibb introduced Orencia, the first biologic therapy for rheumatoid arthritis. In 2009, Bristol-Myers Squibb acquired Medarex, a biotechnology company specializing in monoclonal antibodies. In 2012, Bristol-Myers Squibb launched Eliquis, a novel oral anticoagulant for the prevention of stroke and blood clots. In 2015, Bristol-Myers Squibb acquired Flexus Biosciences, a developer of immuno-oncology drugs. In 2019, Bristol-Myers Squibb acquired Celgene, a biopharmaceutical company focused on hematology and oncology.

In February 2020, BMS and partner Biomotiv launched a new company called Anteros Pharmaceuticals, which focuses on creating inflammation and fibrosis medicines. In August, the business announced it would acquire Forbius and its TGF-beta 1 & TGF-beta 3 inhibitors. In October, BMS announced it would acquire cardiology company MyoKardia for $13.1 billion ($225 per share) gaining control of mavacamten, a cardiovascular drug for obstructive hypertrophic cardiomyopathy (HCM), and the development of two key treatments: danicamtiv (MYK-491) and MYK-224. In June 2022, BMS announced it would acquire Turning Point Therapeutics Inc for $4.1 billion in cash ($76 per share, a 122.5% premium to its last closing price), helping to boost its complement of cancer drugs, specifically repotrectinib.¹⁰ In August 2023, Bristol Myers Squibb partnered with Cellares for the robotic production of CAR-T treatments of which it has two approved. In September 2023, BMS announced it would pay Zenas BioPharma $50m upfront for a strategic license and collaboration to develop and commercialise obexelimab, a novel, bi-functional antibody for autoimmune diseases. In October 2023, BMS agreed to acquire Mirati Therapeutics, an American biotechnology company that develops targeted therapies for the treatment of cancer, in an all-cash deal worth $4.8 billion, and an additional $1 billion in milestone payment. Bristol Myers Squibb (NYSE: BMY) and Karuna Therapeutics, Inc. (NASDAQ: KRTX) (“Karuna”) announced that they have entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Karuna for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired. The company entered into an agreement to purchase RayzeBio, for approximately $4.1 billion, in December 2023.¹¹

References

1. ^ https://finance.yahoo.com/news/bristol-myers-squibb-completes-acquisition-133000913.html?
2. ^ https://www.nasdaq.com/articles/bristol-myers-squibb-to-acquire-rayzebio-for-$62.50-share-in-all-cash-deal
3. ^ https://www.nasdaq.com/articles/bristol-myers-squibb-to-acquire-karuna-therapeutics-for-$330-share-cash
4. ^ https://finance.yahoo.com/news/systimmune-bristol-myers-squibb-announce-211500882.html
5. ^ https://www.onclive.com/view/fda-approves-luspatercept-for-first-line-treatment-of-anemia-in-lower-risk-mds
6. ^ https://www.sec.gov/Archives/edgar/data/14272/000001427223000046/bmy-20221231.htm#
7. ^ https://www.sec.gov/Archives/edgar/data/14272/000001427223000046/bmy-20221231.htm#
8. ^ https://news.bms.com/news/corporate-financial/2023/Bristol-Myers-Squibb-Announces-Additional-3-Billion-Share-Repurchase-Authorization/default.aspx
9. ^ https://www.statista.com/topics/10798/bristol-myers-squibb/
10. ^ https://www.reuters.com/business/healthcare-pharmaceuticals/bristol-myers-buy-turning-point-41-bln-2022-06-03/
11. ^ https://www.bloomberg.com/news/articles/2023-12-26/bristol-myers-adds-to-buying-spree-with-radiological-drugmaker?