Bristol Myers Squibb Company — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. BMS is a global biopharmaceutical company operating as one segment. Amounts below are U.S. dollars; financial figures are in billions unless stated otherwise.
Financial performance
| Metric | 2021 | 2020 | Change / context |
|---|---|---|---|
| Total revenue | $46.385 | $42.518 | Up 9%; approximately 1 percentage point of 2021 growth came from foreign exchange. |
| Net earnings attributable to BMS | $6.994 | $(9.015) | 2020 included the $11.438 billion MyoKardia in-process R&D charge. |
| Diluted GAAP EPS | $3.12 | $(3.99) | 2021 also benefited from a $1.0 billion tax benefit on internal asset transfers. |
| Diluted non-GAAP EPS | $7.51 | $6.44 | Up $1.07; excludes specified items and is not a GAAP measure. |
| Operating cash flow | $16.207 | $14.052 | Up $2.155 billion. |
| Cash, cash equivalents and marketable debt securities | $16.966 | $16.264 | At year-end. |
| Total short- and long-term debt | $44.553 | $50.676 | Net debt declined to $27.587 billion from $34.412 billion. |
Net product sales were $45.055 billion; gross product sales of $67.897 billion were reduced by $22.842 billion of gross-to-net adjustments. Those adjustments equaled 33% of gross sales versus 31% in 2020. Cost of products sold was $9.940 billion, or 21.4% of revenue, compared with $11.773 billion, or 27.7%, in 2020; the filing attributes the decline chiefly to lower inventory purchase-price adjustment unwind. This cost line excludes amortization of acquired intangible assets, which was $10.023 billion. GAAP net margin was approximately 15.1%; 2020 recorded a net loss.
Revenue drivers and changes versus 2020
- Growth was led by Eliquis ($10.762 billion, up 17%), Opdivo ($7.523 billion, up 8%), Yervoy ($2.026 billion, up 20%), Revlimid ($12.821 billion, up 6%), and launches including Reblozyl, Zeposia, Abecma and Breyanzi.
- U.S. revenue rose 10% to $29.214 billion; Europe increased 8% to $10.687 billion; Rest of World increased 3% to $5.632 billion.
- Abraxane revenue fell 5% to $1.181 billion, with international sales down 24%, reflecting manufacturing delays and generic competition. Sprycel decreased 1%, Empliciti 12%, and mature and other brands 14%.
- R&D expense was $11.354 billion, up 2%; 2020 included the separate $11.438 billion MyoKardia IPR&D charge. Marketing, selling and administrative expense was essentially flat at $7.690 billion.
Liquidity, capital allocation and debt
- Year-end current assets were $33.262 billion and current liabilities $21.868 billion. BMS said available cash and securities, operating cash generation and, if needed, commercial paper should cover anticipated needs for at least the next few years.
- Cash flow from investing activities was negative $0.538 billion and financing activities negative $16.224 billion. Capital expenditures were $0.973 billion; the company expects approximately $1.2 billion annually in 2022 and 2023.
- BMS repurchased approximately 102 million shares for $6.2 billion and paid $4.4 billion in dividends in 2021. In February 2022 it entered into $5.0 billion of accelerated share repurchases, funded with cash on hand.
- Debt maturities, including interest, were approximately $6.1 billion in 2022, $5.1 billion in 2023, $4.1 billion in 2024 and $4.7 billion in 2025. BMS repurchased $3.5 billion principal amount of debt for about $4.0 billion cash in 2021, recording a $281 million redemption loss.
Outlook, management commentary and key risks
- Management expects growth from in-line and new products to more than offset revenue declines from Revlimid, Abraxane and other products losing exclusivity through 2025. Revlimid global revenue is expected to decline to approximately $9.5–$10.0 billion in 2022; Abraxane global revenue is expected to decline approximately 25%–30% starting in 2022. The filing text provided does not give consolidated 2022 revenue or EPS guidance.
- Generic lenalidomide launches were expected in parts of Europe beginning in January and February 2022 and in the U.S. under volume-limited licenses beginning March 2022 or later. U.S. Eliquis generic entry is expected no earlier than April 1, 2028 under settlements, subject to challenges; European patent litigation remains ongoing.
- Celgene integration synergies are expected to reach approximately $3.0 billion in annualized pretax savings through 2022; BMS reported about $2.6 billion achieved in 2020. The company remains focused on debt reduction while also returning capital to shareholders.
- Pipeline and launch execution remain material uncertainties. The FDA extended its review of mavacamten to April 28, 2022; deucravacitinib’s psoriasis application had a September 10, 2022 target date. A Phase 2 deucravacitinib ulcerative-colitis study failed its primary and secondary efficacy endpoints.
- COVID-19 had not significantly affected reported results or caused significant supply disruption to date, but patient visits, new starts, clinical-trial enrollment and supply chains remained exposed to pandemic developments.
- Other major exposures include pricing and reimbursement pressure, competition and patent challenges, reliance on key products and third parties, complex cell-therapy manufacturing, acquisition integration, foreign exchange, cybersecurity and legal proceedings. Environmental remediation estimates were $89 million at year-end. The company also disclosed substantial tax uncertainties, including $2.042 billion of gross unrecognized tax benefits.
- Auditor Deloitte & Touche issued unqualified opinions on the financial statements and internal control over financial reporting. The auditor identified U.S. rebate accruals and U.S. transfer-pricing tax liabilities as critical audit matters.
Important facts for investors to verify
- Whether Revlimid and Abraxane erosion and other mature-brand declines are offset by Eliquis, Opdivo and newer launches, and whether the stated product outlook is achieved.
- Progress and final outcomes in Eliquis European patent cases and other patent disputes, including challenges affecting Revlimid, Onureg and other products.
- How much of GAAP earnings and operating cash flow is repeatable versus affected by tax benefits, royalties, equity-investment marks, acquisition accounting and other specified items.
- Debt repayment and liquidity progress alongside the $5.0 billion 2022 accelerated repurchase, dividends, capital spending and near-term maturities.
- Actual performance of the pipeline and launch timetable, particularly mavacamten, deucravacitinib and cell therapies, plus any changes in manufacturing capacity or supply.
- Potential outcomes and financial effects of disclosed litigation, tax examinations, rebate accrual estimates and regulatory or pricing changes; several legal outcomes and possible losses were not estimable in the filing.