What Percent Does Bristol-Myers Squibb Spend On R&D, 30%, 40%, Or 50%?

Bristol-Myers Squibb’s (NYSE:BMY) R&D expenses were 36% of its total expenses in 2018. Total expenses were largely driven by cost of goods sold (COGS) and research and development (R&D), which together accounted for three-fourths of the company’s total expenditure in 2018. Over the recent years, Bristol-Myers Squibb has seen steady revenue and expenses growth. Its total expenses as a percentage of revenue has fluctuated in recent years. The jump in 2017 seen can be attributed to the tax reforms. In this note we discuss the key drivers of Bristol-Myers Squibb’s total expenses. You can look at our interactive dashboard analysis ~ How Does Bristol-Myers Squibb Spend Its Money? ~ for more details.

Bristol-Myers Squibb’s Total Expenses As Percentage of Revenue Has More Or Less Remained In The Range of 76% To 78%.

  • Bristol-Myers Squibb’s total expenses as percentage of revenue grew from 76.6% in 2016 to 78.1% in 2018. It is expected to be 77.7% in 2020.
  • The increase in 2017 can be attributed to the tax reform, and the company recorded a $2.6 billion one-time deemed repatriation transition tax.
  • Looking at the company’s revenues, they grew at an average annual rate of 7.8% from $19.4 billion in 2016 to $22.6 billion in 2018. The growth rate is expected to slow down to 4% on average over the next few years, partly attributed to a slowdown in the company’s top cancer drug, Opdivo’s, sales.

Breaking Down Bristol-Myers Squibb’s Total Expenses


  • COGS, or cost of goods sold, accounted for 37% of the company’s total expense in 2018.
  • COGS as % of revenue grew from 25.5% in 2016 to 29.0% in 2018. Trefis estimates the metric to hover around the 29% mark in the near term.


  • R&D, or research & development expenses, includes the costs of research on drugs, their development, early as well as late stage clinical trials and drug formulation, among other related expenses. It accounted for 36% of the company’s total expense in 2018.
  • R&D as % of revenue grew from 25.4% in 2016 to 28.1% in 2018. The jump in 2017 can be attributed to upfront payments for new licenses and alliance agreements. Trefis estimates the metric to see modest decline in the near term.


  • SG&A or selling, general & administrative expenses includes include salary, benefit costs, professional and marketing fees, shipping and handling costs, advertising and product promotions, among others. It accounted for 26% of the company’s total expense in 2018.
  • SG&A as % of revenue declined from 25.3% in 2016 to 20.2% in 2018. Trefis estimates the metric to decline further to 19.6% in 2020. The decline in the recent years can be attributed to lower spending on the company’s established products.

Income Taxes

Interest & Other Expense

  • Interest & Other Expense, which includes interest expense, investment income, royalties, litigation, divestiture and restructuring related gains and costs, among others, accounted for -3.8% of the company’s total expenses in 2018. Interest & Other Expense as % of revenue grew from -7.0 in 2016 to -3.8% in 2018, and we estimate it to be around -3.3% in 2020.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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