Bristol-Myers Squibb Company (BMY)

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Bristol-Myers Squibb Company (BMY)

Q4 2009 Earnings Conference Call

January 28 2009, 10:30 am ET


John Elicker - Vice President of Investor Relations

Jim Cornelius - Chairman and Chief Executive Officer

Jean-Marc Huet - Executive Vice President and Chief Financial Officer

Lamberto Andreotti - President and Chief Operating Officer

Elliott Sigal - Executive Vice President


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 fourth quarter 2009 earnings release conference call. [Operator Instructions]. At this time, I would like to turn the call over to Mr. John Elicker, Vice President of Investor Relations. Please go ahead Mr. Elicker.

John Elicker

Thank you and good morning everybody and thanks for joining us. The purpose of the call this morning is to review our fourth quarter results and outlook for 2010. With me today are James M. Cornelius our Chairman and Chief Executive Officer, Lamberto Andreotti our President and Chief Operating Officer, Elliott Sigal, our Executive Vice President and Chief Scientific Officer and also for the first time, Charlie Bancroft, Senior Vice President and our Acting CFO. Jim and Charlie will have prepared remarks and then Lamberto and Elliott will be here for Q & A as well.

I will take care of the legal requirements first. During the call, we will 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 that constitute forward-looking statements for the 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 10-K, and our reports on Form 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. It 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.

James Cornelius

Thanks John. Good morning everyone. It was three years ago in January 2007 when I first had the privilege of announcing and try and explain results of Bristol-Myers Squibb. I am very pleased every quarter we have delivered on what we said we do. Fourth quarter this last year is no exception to that. Before reviewing our fourth quarter performance which was very strong both strategically and operationally I want to step back, highlight some of the key steps we took in 2009. The most recent in December, we split off our remaining ownership in Mead Johnson Nutrition Company, making us a fully focused Bio pharma company.

As you know this strategic decision and complex transaction was very well received and has created significant shareholder value in a tax efficient way and lower the number of Bristol-Myers Squibb shares outstanding as we go forward.

Also of importance, we extended our Abilify agreement with Otsuka giving us 29 additional months of Abilify contribution to our sales and earnings. Just as a reminder, we expect that extension will be accretive by at least $0.30 per share in both 2013 and 2014, probably when we need it the most.

We acquired Medarex, our largest Pearl to date, in our String of Pearls. In addition to full rights to the [inaudible] oncology compound, ipilimumab, we gained access to novel technology platforms, scientific knowledge, and outstanding research people.

We launched ONGLYZA in six countries, including the US and UK as we advanced our robust innovative pipeline. The past year was truly transformational for Bristol-Myers Squibb. I can now say definitively, that we gone from becoming Bio pharma to being Bio pharma.

Within that as a background, let me turn to our fourth quarter results, which is excellent execution across the company. In the fourth quarter our revenues grew a 11%, or if I adjust those for the retail and our foreign exchange a 7% growth rate globally, as compared to the same period a year ago.

Our key drivers, Plavix and Abilify, continue to have double digit global growth. BARACLUDE, Sprycel, ORENCIA all grew 30% or more in the quarter, indicating how customers positively pursue the value of these recent launches. In our HIV portfolio, REYATAZ and Sustiva franchise both had solid growth of nearly 20%.

All the top line growth remained focused on executing our productivity initiatives and we are seeing improvements in our operating and pre-tax margins as well as in net income. Our non-GAAP operating margin improved by 300 basis points and our pre-tax margins are up over 200 basis points compared to a year ago.

By executing at both the top and bottom line for the fourth quarter, we have realized an 18% increase in our non-GAAP diluted earnings per share from the continuing operations.

We also grew up full year non-GAAP EPS from continuing operations by 24%. Financially, as you know, we have focused on cash flow management and that is reflected by our year-end cash position of approximately $10 billion in cash and marketable securities, which is competitive among our peer group.

Translating that into a net cash that is a positive $3.5 billion and very strong. As a result, we continue to pursue acquisitions, licensing deals, and partnerships through our String of Pearls strategy.

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