Bristol Myers Squibb — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing, not a standalone fourth-quarter report. BMS is a global biopharmaceutical company operating as one reportable segment. Dollar amounts are U.S. dollars.
Financial performance
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Total revenue | $46.159 billion | $46.385 billion | Down 0.5% |
| Net earnings attributable to BMS | $6.327 billion | $6.994 billion | Down 9.5% |
| Diluted GAAP EPS | $2.95 | $3.12 | Down $0.17 |
| Diluted non-GAAP EPS | $7.70 | $7.16 | Up $0.54 |
| Operating cash flow | $13.066 billion | $16.207 billion | Down $3.141 billion |
| Capital expenditures | $1.118 billion | $0.973 billion | Up $145 million |
Net margin was approximately 13.7% in 2022, compared with 15.1% in 2021. Gross-to-net adjustments were $24.962 billion, or 36% of gross product sales, versus $22.842 billion, or 33%, in 2021. The company reported a 17.7% effective tax rate, compared with 13.4%; excluding specified items, the rates were 15.3% and 16.0%, respectively.
- Revenue mix: U.S. revenue rose 9% to $31.828 billion; international revenue fell 17% to $13.497 billion, including a 9% adverse foreign-exchange impact. No single non-U.S. country exceeded 10% of total revenue.
- Key products: Eliquis revenue increased 10% to $11.789 billion and Opdivo increased 10% to $8.249 billion. Revlimid fell 22% to $9.978 billion; Abraxane fell 31% to $811 million.
- Profit drivers and charges: GAAP earnings were affected by $801 million of equity investment losses, $9.595 billion of acquired-intangible amortization, and $815 million of acquired IPRD expense. Non-GAAP earnings exclude specified items; the company cautions that this measure is not a substitute for GAAP results.
Liquidity, debt and capital allocation
- Cash and cash equivalents were $9.123 billion, with another $130 million in marketable debt securities, versus combined cash and securities of $16.966 billion a year earlier.
- Total short- and long-term debt was approximately $39.320 billion; net debt was $30.067 billion, up $2.480 billion year over year. The current ratio was approximately 1.25.
- Operating cash flow of $13.066 billion was lower year over year, principally reflecting $1.9 billion of additional tax payments associated largely with capitalization and amortization of R&D costs for tax purposes, as well as acquisition-related payments and working-capital timing.
- BMS repurchased $8.001 billion of shares and paid $4.634 billion in dividends during 2022. Remaining repurchase authorization was $7.2 billion at year-end. The company had no revolving-credit-facility borrowings and no commercial paper outstanding.
- Debt maturities total approximately $10.6 billion through 2026. Management said existing liquidity and anticipated operating cash flow should cover expected needs for at least the next few years. Moody’s and S&P ratings were A2 and A+, respectively, both with stable outlooks.
Material changes and business developments
- Revenue was broadly flat: growth in Eliquis, Opdivo and newer products was offset by Revlimid and other loss-of-exclusivity erosion and foreign exchange.
- U.S. Revlimid generic entry began under volume-limited licenses in 2022; generic lenalidomide also entered European markets. Management expects global Revlimid revenue to decline to approximately $6.5 billion in 2023.
- In August 2022, BMS acquired Turning Point for $4.1 billion in cash, or $3.3 billion net of acquired cash, adding repotrectinib and other precision-oncology assets.
- 2022 approvals included Opdualag, Camzyos and Sotyktu, as well as additional indications and market approvals for existing medicines. The company reported 18 approvals for new medicines, indications or formulations in major markets.
- Royalties and licensing income included $1.283 billion of royalty and licensing income and $832 million of divestiture-related royalty income in 2022. Management identified royalties as a meaningful contributor to pretax income; reported pretax income from royalties was approximately $2.5 billion.
Outlook, risks and contingencies
- Management outlook: BMS expects growth in in-line and new products to more than offset revenue declines from Revlimid, Abraxane and other products losing exclusivity through 2025. This is a strategic expectation, not a specific full-year financial forecast in the supplied filing text. No clear 2023 revenue or EPS guidance value is provided here.
- Management expects capital expenditures of approximately $1.2 billion in each of 2023 and 2024, including investment in cell-therapy and other manufacturing capacity.
- Key commercial risks include pricing and reimbursement pressure, the U.S. Inflation Reduction Act, payer rebates, generic and biosimilar competition, concentration in major products, and foreign-exchange effects. BMS estimates that Eliquis generics may enter the U.S. under settlements from April 2028, subject to challenges; European litigation and at-risk generic launches create earlier uncertainty.
- Pipeline and execution risks include clinical-trial failures, regulatory delays, manufacturing constraints—particularly for CAR-T therapies—and the need for new products to replace revenue lost to patent expiry. BMS and Nektar discontinued the bempegaldesleukin-plus-Opdivo development program after studies failed to meet specified endpoints.
- Legal matters include ongoing patent, product-liability, antitrust and securities cases. BMS says it generally cannot estimate potential losses for many proceedings. A Hawaii Plavix matter carries a $417 million amount attributed to BMS under a judgment being appealed; the company says it does not believe a reserve is warranted. The CVR litigation includes claims alleging breach related to a potential $6.4 billion obligation; BMS disputes the claims, and the filing does not state a clear estimated loss.
- Environmental remediation liabilities were estimated at $91 million at year-end. BMS also reported $22.0 billion of potential contingent R&D milestone payments and up to $17.5 billion in sales-based milestones, payable only if specified events occur.
- The financial statements received an unqualified audit opinion, and management and the auditor concluded internal control over financial reporting was effective as of December 31, 2022.
Important facts for investors to verify
- Whether new-product growth can offset the pace of Revlimid and other loss-of-exclusivity erosion, including the approximately $6.5 billion Revlimid revenue expectation for 2023.
- How U.S. and European Eliquis patent decisions and generic launches affect revenue, market access and the expected timing of broader generic competition.
- Whether reported cash generation recovers from the 2022 decline as tax payments, acquisition spending and working-capital timing change.
- The debt-reduction trajectory after buybacks, dividends and the Turning Point acquisition, and the company’s ability to meet upcoming maturities while funding R&D and capital investment.
- The financial effects of the Inflation Reduction Act, including drug-price provisions, inflation rebates and the excise tax on net share repurchases.
- Updates on major litigation, tax audits, product supply and manufacturing capacity, and the progress and commercial uptake of newer products and late-stage pipeline programs.