Bristol-Myers Squibb Highlights Strong Pipeline, Strategic Execution in Meeting with Investment Community
Shella Tameze, Bristol-Myers Squibb Research Scientist NEW YORK, March 4, 2010 -- During a meeting with the investment community today, Bristol-Myers Squibb Company provided a comprehensive business overview and an optimistic future outlook, highlighted by a robust, differentiated pipeline.
Senior management reiterated the company is well-positioned to deliver on sales and earnings growth in 2010 and has significant strategic imperatives in place to drive future top-line and bottom-line growth.
The company said it has the results of several clinical trials -- including a phase 3 study of ipilimumab for second-line metastatic melanoma, a first-line chronic myeloid leukemia (CML) study of SPRYCELTM, and a phase 3 study evaluating subcutaneous administration of ORENCIA® for rheumatoid arthritis. The company has submitted the data for presentation at upcoming medical conferences and is in discussions with health authorities worldwide in planning for potential regulatory submissions in 2010.
In addition, the company said it expects minimum non-GAAP 2013 earnings per share to be $1.95, setting a base for sustained growth expected to begin in 2014. The company expects 2013 to be the first full year of impact from the loss of patent exclusivity for PLAVIX® in the U.S. The guidance excludes any potential impact from U.S. healthcare reform and the impact of business development (String of Pearls) activities as well as specified items described under "Use of Non-GAAP Financial Information" below. The guidance further assumes strong underlying revenue trends for certain key products, continued and additional productivity savings, significant contributions from pipeline products that are expected to receive regulatory approval and regulatory approval of new indications for several currently marketed products, and exclusivity for ABILIFY® through the term of the agreement with Otsuka Pharmaceutical Co., Ltd.
The meeting was the first with the investment community since the company outlined its BioPharma strategy in December 2007. Since then, Bristol-Myers Squibb has consistently delivered on its commitments -- strategically, financially and operationally -- and in the process has transformed into a next-generation BioPharma leader.
"In December 2007, we outlined a strategy and a set of deliverables. Since then we have executed relentlessly on our BioPharma strategy, meeting our commitments and sustaining excellent operational and financial performance," said James M. Cornelius, chairman and chief executive officer. "We have fundamentally differentiated ourselves from our competitors as a focused biopharmaceutical company that is well-positioned to deliver on the promise of our pipeline."
MANAGEMENT UPDATE
On March 2, the company announced that Lamberto Andreotti, president and chief operating officer, has been designated by the Board of Directors to serve as the company's chief executive officer, effective May 4 when Cornelius will retire as CEO. At the request of the Board, Cornelius will remain as non-executive chairman.
STRATEGIC OUTLOOK
Andreotti reviewed the company's strategic transformation, highlighted opportunities and challenges immediately ahead and outlined the company's key imperatives, explaining how executing on the imperatives could translate into future success.
"I am fully confident in our ability to deliver on our three major strategic imperatives -- driving our performance in the next few years, raising our earnings base in 2013 and sustaining growth in 2014 and beyond," said Andreotti. "We have important strategic, operational and financial levers which will allow us to fully realize our potential as a BioPharma leader, and to deliver on our near-term and long-term growth opportunities."
Andreotti reiterated that the company has delivered consistently on the strategy it outlined in late 2007 at the last investment meeting and that he is confident the company will continue to deliver. The company has a solid balance sheet and financial flexibility with about $10 billion in cash and marketable securities available.
He identified three strategic imperatives to drive value: deliver operationally in 2010 and 2011, raise the earnings base in 2013 and sustain growth in 2014 and beyond. To achieve these imperatives, he said the company must continue to drive top-line revenue growth from current and potentially new products, deliver on the promising pipeline, build upon the progress made in productivity initiatives and wisely use cash, working capital and other financial tools to invest in the future.
Key revenue drivers such as PLAVIX®, ABILIFY and the HIV portfolio continue to demonstrate solid global growth. More recent launches such as ORENCIA®, SPRYCELTM and BARACLUDE® have also continued to grow rapidly and are becoming established leaders in their respective therapeutic areas.
Andreotti also highlighted the important strategic contribution of ONGLYZATM and promising trends which have been realized since its launch in 2009. Five other compounds -- apixaban, belatacept, brivanib, dapagliflozin and ipilimumab -- are expected to be launched by 2012, subject to regulatory approval. In combination, these compounds represent a significant transformation of company's BioPharma portfolio and are expected to drive growth in 2013 and beyond.
R&D OVERVIEW
Bristol-Myers Squibb also featured an extensive overview of its pipeline portfolio. The research and development organization has brought forward 10 new products in the past seven years and has 60 compounds in development, seven in full development.
"We have strategically transformed our research and development organization into one of the most productive and innovative in the pharmaceutical and biotech industries," said Elliott Sigal, M.D., Ph.D., executive vice president, chief scientific officer and president, research and development. "In addition to our recent launches and our late-stage pipeline, I am excited about our emerging data for compounds that represent potential advances in the treatment of serious diseases."
Bristol-Myers Squibb announced the following pipeline highlights:
- The company has data from its first phase 3 study (MDX-020) of ipilimumab, which had a primary endpoint of overall survival and was conducted in patients with previously-treated melanoma. Ipilimumab is a novel immuno-oncology compound in late-stage development. The company has submitted study results for scientific presentation at the American Society of Clinical Oncology (ASCO) annual meeting in June. Management said it is in discussions with health authorities worldwide in planning for submitting biologics licensing applications (BLA) in this patient population.
- The company also has data from a randomized phase 2 study of ipilimumab in non-small cell lung cancer that it also has submitted for presentation at ASCO this year. As a result of the study, the company is moving forward with a phase 3 study of ipilimumab in this indication.
- The company has the phase 3 results from a trial in first-line CML comparing SPRYCEL to imatinib. The company has submitted the study results from the DASISION trial for scientific presentation at ASCO. Based on these data, the company is in discussions with health authorities worldwide in planning for global regulatory submissions in 2010.
- The company has the phase 3 results from a study comparing intravenous and subcutaneous administration of ORENCIA, a novel T-cell costimulation modulator for the treatment of rheumatoid arthritis. The company plans to submit the study results for scientific presentation at a medical meeting later this year. Based upon these data, the company is in discussions with health authorities worldwide in planning for global regulatory submissions in the second half of 2010.
- The company has results of a phase 2a study of its NS5A inhibitor for hepatitis C. The study evaluated the combination of NS5A, pegylated interferon alfa-2A and ribavirin in treatment-naïve hepatitis C patients and the data have been submitted for scientific presentation at the upcoming European Association for the Study of the Liver conference.
- Management also conducted an in-depth review of Bristol-Myers Squibb's late-stage pipeline, which includes the recently-launched ONGLYZA as well as five other compounds -- apixaban, belatacept, brivanib, dapagliflozin and ipilimumab, which are expected to be launched by the end of 2012, subject to regulatory approval.
ONGLYZA, a DPP-4 inhibitor, was launched in the U.S. and Europe with AstraZeneca in 2009 and is gaining traction as an option for type 2 diabetic patients. The companies recently completed a submission to the U.S. Food and Drug Administration (FDA) for a fixed-dose combination with metformin. The companies plan to submit an application in Europe for this fixed-dose combination.
Apixaban is an anticoagulant being developed with Pfizer as a potential replacement for warfarin. The company is developing apixaban to prevent strokes in atrial fibrillation and for acute coronary syndrome. The initial indication will focus on preventing venous thromboembolisms (VTE). The companies expect to submit a filing for approval for VTE prevention indication in Europe in the first half of this year, and potentially file in the U.S. as well by the end of the year.
On March 1, the FDA Cardiovascular and Renal Drugs Advisory Committee voted 13 to 5 to recommend approval of belatacept, a selective co-stimulation blocker, for the prevention of acute rejection at the time of initial kidney transplant. The FDA is not bound by the recommendations of its Advisory Committee, but takes its advice into consideration when reviewing new drug applications. The PDUFA date is May 1. The company has also filed for approval in Europe. New data will be presented at the American Transplant Congress in May including two-year data from phase 3 trials, data on avoiding steroid use with belatacept and data for patients who have been converted from calcineurin inhibitors to belatacept.
Brivanib represents a pillar in Bristol-Myers Squibb's commitment to improve outcomes for patients facing a diverse set of liver diseases. Brivanib is in phase 3 development initially for the treatment of hepatocelluar carcinoma (HCC). Approximately 700,000 patients are diagnosed with HCC annually worldwide. Due to the high disease burden, the company has focused its development efforts in the emerging markets of the Asia-Pacific region.
Dapagliflozin, an SGLT2 inhibitor, represents a potentially first-in-class diabetes treatment that has the potential to control glucose and could also potentially lower blood pressure and weight in diabetic patients. Additional phase 3 data are expected to be presented this year.
Ipilimumab is also being studied in first-line metastatic melanoma and small cell lung cancer. It represents a potential paradigm shift in how melanoma can be treated and, because of its unique mechanism of action, may have utility in other cancers.
The company also highlighted its earlier-stage clinical development programs in hepatitis C and Alzheimer's disease:
In Alzheimer's disease, Bristol-Myers Squibb has adopted a multi-pronged approach, targeting two biochemical pathways and developing compounds that prevent the production of Abeta and abnormal tau. These could halt the progression of Alzheimer's disease early enough in the course of the disease to make a significant difference to patients. The company has a gamma secretase inhibitor in phase 2 development, as well as a microtubule stabilizer which targets abnormal tau and will enter phase 1 development later this year.
In hepatitis C, the company is developing effective regimens that could improve cure rates by increasing efficacy, improving safety and tolerability and reducing duration of treatment. The company is collaborating with ZymoGenetics on a pegylated interferon lambda in phase 2 development which has the potential to replace PEG interferon alpha as the standard of care. In addition, the company is developing small molecule antivirals, the most advanced being an NS5A inhibitor studied in combination with interferon plus ribvarin.
Use of Non-GAAP Financial Information
This article contains non-GAAP financial measures, including non-GAAP 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 the purchase or sale of businesses and product lines; 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 in-licensing of products that have not achieved regulatory approval that are immediately expensed; in-process research and development charges prior to 2009; impairments to investments; special initiative funding to the Bristol-Myers Squibb Foundation; 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. These items are also not included in the company's operating segment 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. With respect to the 2013 minimum non-GAAP EPS guidance, there is no reasonably accessible or reliable comparable GAAP measure for this forward-looking information on earnings per share.
Statement on Cautionary Factors
This article 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, competitive product development and approvals, 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. These factors also include the company's ability to execute successfully its strategic plans, including its String of Pearls strategy and Productivity Transformation Initiative, 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.