NEW YORK, April 24 /PRNewswire-FirstCall/ -- Bristol-Myers Squibb Company today reported strong double-digit net sales growth and solid earnings growth for the first quarter 2008 and reaffirmed 2008 earnings guidance.
“Our medicines are performing well, as was evident this quarter, and our pipeline is steadily advancing. This is good news for patients and healthcare professionals who count on us, as well as shareholders who invest in us,” said James M. Cornelius, chairman and chief executive officer, Bristol-Myers Squibb. “As we have pledged to patients and investors, we remain focused on discovering and developing medicines that will help people prevail in their fight against serious disease. We continue to review options within our “String of Pearls” strategy, to further complement our existing pipeline, technology and talent pool.
“We also continue to invest in our business as we embed a mindset of continuous improvement, which is helping us grow our profit margins. Our strong first quarter performance and our focus on execution put us on the right track for continued growth in 2008.”
UPDATE ON STRATEGIC REVIEW OF NON-PHARMACEUTICAL BUSINESSES
Bristol-Myers Squibb completed the sale of Bristol-Myers Squibb Medical Imaging to Avista Capital Partners in January 2008 for approximately $525 million.
The company has made significant progress on a strategic direction for ConvaTec and expects to provide updates in the near future.
Bristol-Myers Squibb currently plans to file a registration statement by year-end to sell approximately 10 percent and no more than 20 percent of Mead Johnson Nutritionals to the public through an initial public offering and to retain at least an 80% equity interest in Mead Johnson Nutritionals as part of the overall business portfolio for the foreseeable future. After extensively considering strategic options, management believes this plan will allow Mead Johnson Nutritionals to implement its growth plans, increase shareholder value, and maintain its important financial contribution to Bristol-Myers Squibb. The execution of the plan is dependent upon and subject to a number of factors and uncertainties including business and market conditions.
INCOME TAX
The effective tax rate on earnings from continuing operations before minority interest and income taxes was 27.8% for the three months ended March 31, 2008, compared with 8.0% in the first quarter of 2007. The first quarter 2007 effective tax rate included $105 million of benefit due to a favorable resolution of certain tax matters, including a $39 million benefit related to a 2006 specified item. The company expects the full year 2008 non-GAAP effective tax rate from continuing operations to be in line with the previously issued guidance of approximately 24%.
SPECIFIED ITEMS
In the three months ended March 31, 2008 and 2007, the company recorded specified income and expense items that affected the comparability of the results. This included first quarter 2008 charges of $113 million in connection with the execution of the previously announced PTI and $25 million related to an additional impairment of the company’s investments in auction rate securities that were previously impaired.
For information on specified items, see Appendix 1. Details reconciling these non-GAAP amounts with GAAP amounts including specified items are provided in Appendix 1 attached and in supplemental materials available on the company’s website.
PHARMACEUTICAL BUSINESS PERFORMANCE
U.S. pharmaceutical sales increased 26% to $2.5 billion in the first quarter of 2008 compared to the same period in 2007, primarily due to the continued growth of ABILIFY(R) and increased sales of PLAVIX(R), as well as strong results from the HIV and hepatitis portfolio and increased contribution from recent launches.
International pharmaceutical sales increased 14%, including a 12% favorable foreign exchange impact, to $1.7 billion in the first quarter of 2008 compared to the same period in 2007. The increase was primarily due to strong results from ABILIFY(R) and increased contribution from recent launches including BARACLUDE(R) and SPRYCEL(TM), partially offset by continued generic erosion of PRAVACHOL(R) and TAXOL(R). The company’s reported international sales do not include copromotion sales reported by its alliance partner, sanofi-aventis, for PLAVIX(R) and AVAPRO(R)/AVALIDE(R), which continue to show growth in the first quarter of 2008.
PIPELINE DEVELOPMENTS
The company continues to advance a robust pipeline and expects to submit a U.S. regulatory filing for the diabetes medicine, saxagliptin, in mid-2008. New scientific data on marketed products and compounds in development are scheduled to be presented at upcoming meetings of the American Diabetes Association and the American Society of Clinical Oncology.
In February, a supplemental New Drug Application for ABILIFY(R) was approved by the U.S. Food and Drug Administration (FDA) for the acute treatment of manic and mixed episodes associated with Bipolar I Disorder, with or without psychotic features in pediatric patients (10 to 17 years old). In March, the European Commission authorized marketing of ABILIFY(R) in the treatment of moderate to severe manic episodes in Bipolar I Disorder and for the prevention of a new manic episode in patients who experienced predominantly manic episodes and whose manic episodes responded to ABILIFY(R) treatment.
At the Asian Pacific Association for the Study of the Liver meeting in March, new data demonstrated a continued low incidence of resistance to BARACLUDE(R) in nucleoside-naive patients through five years of treatment, which is important for many chronic hepatitis B patients requiring long-term treatment. BARACLUDE(R) is indicated for the treatment of chronic hepatitis B.
In April, ORENCIA(R) was approved by the FDA for treatment of juvenile rheumatoid arthritis. Additionally, the U.S. label for ORENCIA(R) was revised with an indication that means ORENCIA(R) is an appropriate option for patients with moderate-to-severe rheumatoid arthritis, regardless of prior treatment received.
The European Committee for Medicinal Products for Human Use (CHMP) in March issued a positive opinion recommending approval of the 300 milligram loading dose tablet of PLAVIX(R). This positive opinion was ratified by the European Commission in April.
The first data comparing boosted REYATAZ(R) (REYATAZ plus ritonavir) and lopinavir/ritonavir was presented at the Congress on Retroviruses and Opportunistic Infections in February. The CASTLE study showed similar efficacy between once-daily REYATAZ (atazanavir sulfate)/ritonavir and twice- daily lopinavir/ritonavir at 48 weeks in previously untreated HIV-infected adult patients. Data also showed differences in gastrointestinal and lipid effects between REYATAZ/ritonavir and lopinavir/ritonavir among the study population.
2008 GUIDANCE
Bristol-Myers Squibb reaffirms its 2008 earnings guidance for fully diluted earnings per share from continuing operations on a GAAP basis to be between $1.36 and $1.46. The company also reaffirms its 2008 fully diluted earnings per share from continuing operations guidance on a non-GAAP basis to be between $1.60 and $1.70. The non-GAAP guidance excludes specified items as discussed under “Use of Non-GAAP Financial Information.” Details reconciling adjusted non-GAAP amounts with the amounts reflecting specified items are provided in supplemental materials available on the company’s website.
The company reaffirms guidance that it expects non-GAAP earnings per share from continuing operations to grow at a minimum of 15 percent compounded annual growth rate, from the 2007 base through 2010, excluding costs associated with the Productivity Transformation Initiative and other specified items that have not yet been identified and quantified.
The 2008 guidance and the three-year compound annual growth rate exclude other specified items such as gains or losses from sale of businesses and product lines; from sale of equity investments and from discontinuations of 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; payments for in-process research and development; debt retirement costs; impairments to investments; and significant tax events.
The financial guidance for 2008 and the three-year compound annual growth rate exclude the impact of any potential strategic acquisitions and divestitures and further assume that the company and its product partner, sanofi-aventis, maintain exclusivity for the PLAVIX(R) patent through at least 2010.
Use of Non-GAAP Financial Information
This press release contains non-GAAP financial measures, including non- GAAP earnings and earnings per share information, adjusted to exclude certain costs, expenses, gains and losses and other specified items. Among the items in GAAP measures but excluded for purposes of determining adjusted earnings and other adjusted measures are: charges related to implementation of the Productivity Transformation Initiative; gains or losses from sale and leaseback of properties and from discontinuations of operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges relating to significant legal proceedings; upfront and milestone payments for in-licensing of products that have not achieved regulatory approval that are immediately expensed; payments for in-process research and development; impairments to investments; and significant tax events. This information is intended to enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. For example, non-GAAP earnings and earnings per share information is an indication of the company’s baseline performance before items that are considered by the company to be not reflective of the company’s ongoing results. In addition, this information is among the primary indicators the company uses as a basis for evaluating company performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.
Statement on Cautionary Factors
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as “anticipate”, “estimates”, “should”, “expect”, “guidance”, “project”, “intend”, “plan”, “believe” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, market factors, (including whether uncertainties in the credit and capital markets or a further deterioration of these markets will lead to future impairments to the company’s investment portfolio) competitive product development, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical rebates and reimbursement, claims and concerns that may arise regarding the safety and efficacy of in- line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, difficulties and delays in product development, manufacturing or sales, patent positions and the ultimate outcome of any litigation matter, including whether Apotex will prevail in its appeal of the District court’s decision in the PLAVIX(R) patent litigation. These factors also include the company’s ability to execute successfully its strategic plans, including its productivity transformation initiatives, the expiration of patents or data protection on certain products, and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the products will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company’s periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Company and Conference Call Information
Bristol-Myers Squibb is a global pharmaceutical and related health care products company whose mission is to extend and enhance human life.
There will be a conference call on April 24, 2008 at 10:30 a.m. (EDT) during which company executives will address inquiries from investors and analysts. Investors and the general public are invited to listen to a live web cast of the call at www.bms.com/ir or by dialing 913-312-0861, confirmation code 4556649. Materials related to the call will be available at the same website prior to the call.
ABILIFY(R) is the trademark of Otsuka Pharmaceutical Co., Ltd.
ATRIPLA(TM) is a trademark of both Bristol-Myers Squibb Co. and Gilead Sciences, Inc.
FOR SELECTED PRODUCTS:
The following table sets forth worldwide and U.S. reported net sales for selected products for the three months ended March 31, 2008 compared to the three months ended March 31, 2007. In addition, the table includes, where applicable, the estimated total U.S. prescription change for the retail and mail-order channels for the comparative periods presented for certain of the company’s U.S. pharmaceutical products based on third-party data. A significant portion of the company’s U.S. pharmaceutical sales is made to wholesalers. Where changes in reported net sales differ from prescription growth, this change in net sales may not reflect underlying prescriber demand.
CONTACT: Communications, Brian Henry, +1-609-252-3337, Tracy Furey,
+1-609-252-3208, Investor Relations: John Elicker, +1-212-546-3775, Suketu
Desai, +1-609-252-5796, all for Bristol-Myers Squibb Company
Web site: http://www.bms.com//
