Bristol-Myers Squibb Company (BMY)

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Bristol-Myers Squibb Co.(BMY)

Q3 2009 Earnings Call

October 22, 2009 10:30 am ET


John Elicker - VP of IR

Jim Cornelius - Chairman and CEO

Jean-Marc Huet - EVP and CFO

Lamberto Andreotti - President and COO

Elliott Sigal - CSO


John Boris - Citi

Tony Butler - Barclays Capital

Jami Rubin - Goldman Sachs

David Risinger - Morgan Stanley

Steve Scala - Cowen

Seamus Fernandez - Leerink Swann

Keyur Parekh - UBS.

Chris Schott - JPMorgan

Tim Anderson - Sanford Bernstein



Good day, and welcome to today's Bristol-Myers Squibb third quarter 2009 earnings release teleconference. Today's call is being recorded. At this time, I would like to turn the call to Mr. John Elicker, Vice President Investor Relations. Please go ahead Mr. Elicker.

John Elicker

Thanks, Tony, and good morning everybody. Thank you for joining us to review our Q3 results. With me this morning are Jim Cornelius, our Chairman and Chief Executive Officer; Jean-Marc Huet, our Executive Vice President and Chief Financial Officer. Both Jim and Jean-Marc will have prepared remarks. Also joining us are Lamberto Andreotti, President and Elliott Sigal, Chief Scientific Officer will be available for Q&A.

So, before we get started, let me cover the legal requirement. During this call, we'll make statements about the company's future plans and prospects, including statements about our financial position, business strategy, research pipeline, concerning product development and product potential. These constitute forward-looking statements for purposes of the Safe Harbor provisions under the private securities litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the company's most recent annual report on Form 10-K, periodic reports on 10-Q and current reports on form 8-K. These documents are available from the SEC, the Bristol-Myers Squibb website or from Bristol-Myers Squibb Investor Relations.

In addition any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change.


Jim Cornelius

Thanks, John, and good morning, everyone. Our third quarter clearly shows how we are transforming Bristol-Myers Squibb into a BioPharma leader. As you know, we unveiled the BioPharma vision for the first time in December of 2007. Since then, we have consistently delivered outstanding financial performance through a combination of marketplace execution and productivity initiative. We are mainly focused on biopharmaceuticals and we're building our Mead Johnson Nutrition Global business as well as a separate 83% owned affiliate.

Finally, we are discovering, developing and delivering innovative new medicines led by the efforts of our R&D and commercial organizations. On the top end bottom-line, we are driving solid financial performance. Our BioPharma revenues grew 6% globally led by an impressive 12% sales growth in the U.S. business.

Our brands face new and expanded competition and we are successfully meeting the marketplace challenges. For example, PLAVIX grew 9% globally, ex-Foreign exchange, despite the launch of Lilly's Efient. BARACLUDE was up 37% ex-FX and ORENCIA up 38% on the same basis in very competitive markets in both Hepatitis B and rheumatoid arthritis, respectively. REYATAZ had a 9% growth worldwide ex-Forex and remains the protease inhibitor of choice even with increasing competition.

While growing revenue, we also focused on gaining cost efficiencies through continuous improvement. You can see the results of these efforts in our BioPharma gross margin improvement of a 170 basis points. At the bottomline is our non-GAAP earnings per share from continuing operations grew 16% versus last year.

Reflecting the strength of our business performance, we are refining our 2009 non-GAAP earnings per share from continuing operations guidance to the range of $2 to $2.05, which is at the high-end of our previous guidance.

Our net cash position at September 30th was $1.3 billion and that's after taking into account the $2.1 billion net impact of our important Medarex acquisition, the latest in the String of Pearls. Also today, Mead Johnson announced it's considering options to refinance its intercompany debt, which could result in $1.75 billion payment to us, upon closing of that refinancing.

Our financial strength and strong cash flows provide us the flexibility to execute the String of Pearls strategy, and we will continue to aggressively pursue acquisitions, licensing deals and other partnerships. With our decisions over the past few years, we've increased the focus on our BioPharma business, that is bringing innovative medicines to patients.

Our latest launch is ONGLYZA for the treatment of Type 2 Diabetes. Diabetes is an emerging global epidemic. We've collaborated quite well with our colleagues at AstraZeneca on ONGLYZA and we are optimistic about its potential. We have launched in the U.S., Mexico, United Kingdom and Germany and are moving quickly to launch in additional markets worldwide.

We've also recently announced the FDA's acceptance of our biologics licensing investigation for belatacept. The investigational compound designed to help prevent rejection of transplanted kidneys. In addition, we presented the first Phase III data for dapagliflozin, a novel medicine for the treatment of Type 2 Diabetes.

Research and development at Bristol-Myers continues to be very productive and is preparing our company for leadership in a number of areas of unmet medical need. Through consistently strong operational results, disciplined financial management, advancement of a robust pipeline and continued focus on strategic execution, we are making excellent progress, as I said earlier in our transformation to our next generation BioPharma leader.

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