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U.S. business Bristol Myers Squibb was founded in the early 1800s and aims to combine the reach and resources of a global pharma company with the entrepreneurial spirit and agility of a biotech firm. European sites in Germany, Ireland, Switzerland, Belgium, France and the U.K. host employees. Global flexibility guidelines aim to optimize working patterns for each individual around their role, family responsibilities, health needs and personal preferences. A sense of purpose runs through the company, from influencing EU policies to philanthropy; an employee giving program, administered by the BMS Foundation, doubles staff's financial contributions to eligible charitable organizations. In 2022 the organization donated £2 million to NHS cancer services, charities and patient groups.

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Modern Board 2023-Bristol Myers Squibb

Last year, the New York–based Bristol-Myers Squibb tied ESG initiatives to executive compensation in a first for the pharmaceutical company. That effort came after a 2022 initiative to have 25% of clinical trials in diverse communities. CEO Giovanni Caforio chairs the 11-member board, of whom 10 are independent directors. Other directors include Peter Arduini, president and CEO of GE Healthcare, and Paula Price, who most recently served as Macy’s chief financial officer. Deepak Bhatt, director of Mount Sinai Heart, is the latest board appointment, tapped for his extensive cardiovascular research and clinical trial expertise. In June, the board <a href="https://www.fiercebiotech.com/biotech/bms-strikes-roche-rivalry-41b-acquisition-turning-point">approved the acquisition</a> of cancer drug company Turning Point Therapeutics for $76 a share in a deal totaling $4.1 billion. The firm is still scouting for new M&amp;A deals, Caforio said in its latest earnings call, as the pharma giant tries to offset a sales loss from two drugs that lost patent exclusivity last year. Also in 2022, the company laid off roughly 170 employees due to redundancies from its 2019 acquisition of Celgene. Women and minorities separately make up 36% of the board. Current chief operating officer Christopher Boerner will succeed Caforio when he steps down in November.

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The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-095-Bristol Myers Squibb

The New York City–based pharmaceutical giant had a lackluster 2022, dropping 13 spots on the Fortune 500 as its revenue decreased by 0.5% and profits dropped 9.5% from the prior year. 
<ul> 
 	<li>In 2022, Revlimid, a cancer drug, lost exclusivity in the U.S., which allowed generics to eat into its market share. Once a company blockbuster, the drug saw a 22% decrease in revenue from $12.8 billion in 2021 to approximately $10 billion in 2022.</li> 
 	<li>Bristol-Myers Squibb’s other top drugs, Eliquis, an anticoagulant, and Opdivo, used for chemotherapy, brought in 21% and 15% more revenue, respectively, for 2022.</li> 
 	<li>The company faces a steep patent cliff ahead as exclusivity for Eliquis and Opdivo is set to expire in 2028, and BMS is actively investing to find another drug to add to its portfolio, spending $9.5 billion in 2022 on research and development.</li> 
</ul>

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Modern Boards 2022 Bristol Myers Squibb

The board at pharmaceutical company Bristol-Myers Squibb scored high on age dispersion, and for having a high number of senior independent nonexecutive directors. Bristol-Myers Squibb’s board has three current CEOs, including its own, Giovanni Caforio, and Peter Arduini, CEO of GE Healthcare. Also on the board is Derica Rice, former CVS Health EVP and president of CVS Caremark, the pharmacy benefits management (PBM) business. 
 
Though the company is facing a patent cliff, <a href="https://seekingalpha.com/article/4496603-bristol-myers-squibb-on-track">analysts are optimistic</a> that BMS’s strong pipeline and cash flow will help carry the company in the long run. In 2021 BMS brought in <a href="https://news.bms.com/news/corporate-financial/2022/Bristol-Myers-Squibb-Reports-Fourth-Quarter-and-Full-Year-Financial-Results-for-2021/default.aspx">$46.4 billion</a> in revenue, exceeding its annual target and registering 9% year-on-year growth. The company also <a href="https://www.fiercepharma.com/pharma/bristol-myers-ceo-caforio-takes-pay-cut-employee-metric-drags-down-bonus">reported strong</a> performance on supply-chain reliability and COVID-19 response, with a 99% vaccination rate among its employees in the U.S. and Puerto Rico. BMS published its first <a href="https://www.bms.com/about-us/global-diversity-and-inclusion/diversity-and-inclusion-report.html">global diversity and inclusion report</a> in 2021, setting goals to achieve gender parity at the executive level globally and to double the number of Black and Latinx/Hispanic executives in the U.S. by the end of 2022. 
 
BMS <a href="https://news.bms.com/news/details/2022/Bristol-Myers-Squibb-to-Highlight-Long-Term-Growth-Strategy-at-J.P.-Morgans-40th-Annual-Healthcare-Conference/default.aspx#:~:text=Bristol%20Myers%20Squibb%20plans%20to,dividend%20and%20share%20repurchase%20program.">plans to leverage</a> up to $45 billion in free cash flow in the next two years to execute a capital allocation strategy prioritizing business development and returns to shareholders. The company <a href="https://www.marketwatch.com/story/bristol-myers-squibb-sets-5-bln-accelerated-stock-buyback-bmy-271644409304">recently executed</a> a $5 billion accelerated share repurchase agreement during the first quarter, part of a multiyear $15 billion buyback program.

Organizations on this annual list positively impact people and communities across multiple countries.

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The New York City–based pharmaceutical company delivered strong financial results in 2021, with total revenue growing 9% year over year to $46.4 billion. Bristol-Myers Squibb enjoyed strong sales for drugs like Revlimid and Opdivo, used in the treatment of certain cancers; and Eliquis, an anticoagulant. Its product-development pipeline also looks healthy: In 2021, the company obtained more than 20 regulatory approvals for new medicines.

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Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The New Jersey–based drugmaker jumped up 40 places on this year’s list—with 62.6% revenue growth—because of the additional sales that came with its $74 billion acquisition of Celgene in 2019. Sales of BMS’s anticoagulant Eliquis and its immuno-oncology drug Yervoy also showed strong growth in 2020. The company won 13 additional drug or formulation approvals in the U.S., European Union, and Japan last year; it also acquired MyoKardia, a biotech focused on cardiovascular diseases, for $13.1 billion in November 2020.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">The New Jersey–based drugmaker jumped up 209 places on this year’s Global 500 list—with 62.6% revenue growth—because of the additional sales that came with its $74 billion acquisition of Celgene in 2019. Sales of BMS’s anticoagulant Eliquis and its immuno-oncology drug Yervoy also showed strong growth in 2020. The company won 13 additional drug or formulation approvals in the U.S., European Union, and Japan last year; it also acquired MyoKardia, a biotech focused on cardiovascular diseases, for $13.1 billion in November 2020.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-75-Bristol-Myers Squibb

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The New Jersey–based drugmaker jumped up 40 places on this year’s list—with 62.6% revenue growth—because of the additional sales that came with its $74 billion acquisition of Celgene in 2019. Sales of BMS’s anticoagulant Eliquis and its immuno-oncology drug Yervoy also showed strong growth in 2020. The company won 13 additional drug or formulation approvals in the U.S., European Union, and Japan last year; it also acquired MyoKardia, a biotech focused on cardiovascular diseases, for $13.1 billion in November 2020.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">The New Jersey–based drugmaker jumped up 40 places on this year’s list—with 62.6% revenue growth—because of the additional sales that came with its $74 billion acquisition of Celgene in 2019. Sales of BMS’s anticoagulant Eliquis and its immuno-oncology drug Yervoy also showed strong growth in 2020. The company won 13 additional drug or formulation approvals in the U.S., European Union, and Japan last year; it also acquired MyoKardia, a biotech focused on cardiovascular diseases, for $13.1 billion in November 2020.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-487-Bristol-Myers Squibb

The biopharmaceutical company manufactures medicines for diseases including cancer, diabetes, and psychiatric disorders.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-115-Bristol-Myers-Squibb

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Bristol-Myers Co. and Squibb Corp. merged in 1989 to form what’s now one of the world’s largest pharmaceutical companies. Bristol-Myers Squibb develops, licenses, manufactures, and delivers biopharmaceutical products for the treatment and management of diseases including HIV/AIDS, cancer, blood disorders, and cardiovascular and fibrotic conditions.

Q2 2025

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Bristol-Myers Squibb (BMY): Company Profile, Stock Price, News, Rankings

legacy

Bristol-Myers Squibb

bristol-myers squibb

Good day, and welcome to the Bristol Myers Squibb First Quarter twenty twenty five Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr.

Chuck Triano, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. We appreciate you joining our first quarter twenty twenty five earnings call. Joining me this morning with prepared remarks are Chris Berner, our Board Chair and Chief Executive Officer and David Elkins, our Chief Financial Officer. Also participating in today's call are Adam Lankowski, our Chief Commercialization Officer and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. Earlier this morning, we posted our quarterly slide presentation to bms.com that you can use to follow along with Chris and David's remarks.

Before we get started, I'll remind everybody that during this call, we will make statements about the company's future plans and prospects that constitute forward looking statements. Actual results may differ materially from those indicated by those forward looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date, and we specifically disclaim any obligation to update forward looking statements even if our estimates change. We'll also focus our comments on our non GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of certain non GAAP financial measures to the most comparable GAAP measures are available at bms.com.

Finally, unless otherwise stated, all comparisons are made from the same period in 2024, and sales growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. All references to our P and L are on a non GAAP basis. And with that, I'll hand it over to Chris.

Thanks, Chuck. Good morning, and thank you all for joining our first quarter earnings call. We had a strong Q1, driven by solid execution across the business and continued focus on our strategic priorities, maximizing our growth portfolio, accelerating our R and D pipeline, driving operational excellence and strategically allocating capital. Our plans to transition the portfolio to deliver long term sustainable growth are underway. Today, I will begin with some comments on our first quarter performance and highlight our recent accomplishments.

Then I will discuss our pipeline and upcoming catalysts that can further strengthen our long term growth potential. I'll end by addressing the current operating climate. Starting with performance on Slide four. Our growth portfolio again delivered double digit sales growth driven primarily by strength in key marketed products including our IO portfolio, BRYONZI, REBLOZYL and KEMZIAOS. And as expected, our legacy portfolio performance primarily reflected the impact of generic entries for certain older brands.

So turning back to our growth portfolio, let me speak to our recent launches. As you'll recall, in October, we launched COBINFI, the first truly novel mechanism for the treatment of schizophrenia in decades, and we are pleased with the early prescription trends. Patient and physician feedback is very positive, reflecting its favorable tolerability and efficacy profile and noting that patients are observing cognitive benefits. In January, we launched OPDIVO CUVANTY, the subcutaneous formulation of nivolumab, which is also receiving promising early feedback from practices and patients. And based on our performance in the first quarter, we are increasing our top and bottom line guidance.

David will provide more detail shortly. We continue to advance our pipeline during the quarter with several recent announcements. Opdivo plus Yervoy received FDA and EMA approvals for the treatment of first line liver cancer and FDA approval for use in MSI high colorectal cancer in The U. S, further solidifying its leadership in immuno oncology. BRYONSI was approved in The EU for treatment of follicular lymphoma, expanding our cell therapy presence in blood cancers.

Kymzios received approval in Japan and a favorable label update in The U. S, which reduces the REMS echo monitoring requirement in the maintenance phase. In addition, Milvexian reached an important milestone in the quarter with the completion of enrollment in the Librexia atrial fibrillation trial. This event driven study remains on track to read out in 2027. Turning to Slide five and our two recent top line readouts.

While we're disappointed that the KEMZIAOS OHDICEY study in non obstructive HCM and the COBINFY ARRISE study in adjunctive schizophrenia did not meet their primary endpoints, I want to put the results in proper context. Although these are not the results that we had hoped for, neither outcome meaningfully alters our strategy or growth trajectory. For KAMZIOS, the study strongly suggests that non obstructive and obstructive HCM behave distinctly. We do not expect these data to significantly impact peak sales and our focus remains on our existing obstructive HCM indication, which represents the vast majority of the market opportunity. For COBINFI, although it did not demonstrate a statistically significant improvement as an adjunctive treatment in the ARRISE trial, these data are encouraging, showing a noteworthy improvement for the majority of patients as well as a tolerable safety profile.

As we noted earlier this week, we will complete a full evaluation of the Phase three trial data and will plan to engage with the medical community and regulators to discuss these results and potential next steps. Also, it's important to remember, there are no currently approved adjunctive therapies for schizophrenia. Our commercial strategy remains focused on monotherapy, which accounts for seventy percent to eighty percent of the market, where our goal is for CoBINFI to become the foundational treatment. As I mentioned earlier, CoBINFI's differentiated profile is resonating and we're seeing strong early uptake. Looking ahead, we're confident in the strength of our portfolio and the breadth of opportunities in our pipeline.

We expect several of these opportunities to come this year, such as the first look at one of the Phase III trials for cobinfi in Alzheimer's disease psychosis, where there is significant unmet need. We also plan to initiate several new pivotal studies this year, including seven Phase three studies for COBINFY across three indications: Alzheimer's agitation, Alzheimer's cognition impairment and bipolar I, all expected to be underway by midyear. At the same time, in oncology, we're advancing two next wave solid tumor programs. First, our EGFR FERR3 antibody drug conjugate, Isobren, is expected to begin enrollment in a pivotal study in first line triple negative breast cancer in the coming months. And second, our androgen receptor degrader program in prostate cancer has begun enrolling patients in a pivotal study.

We also expanded our registrational program for gulcotamide, a potential first in class CELMoD for lymphoma. The Goal Seek four study in second line plus follicular lymphoma will explore the combination of gulcotamide with rituximab where we know effective chemo free regimens are needed for patients. In total, we believe these programs represent significant opportunities over the back half of the decade given the unmet medical need. The numerous pivotal data readouts in the coming years have the potential to meaningfully enhance the long term strength of our growth portfolio. Our commitment to innovating for patients remains strong as we advance first and or best in class medicines, both through internal discovery and business development, which remains a top priority.

In terms of BD, we're actively pursuing opportunities that can enhance our growth profile where there's strong strategic alignment and financial rationale. With our renewed organizational agility and balance sheet in a solid position, we have the flexibility to act decisively when we find the right opportunities. As we've said, maximizing long term growth starts with strong execution this year and over the mid term. The growth portfolio is performing well and our pipeline is advancing. At the same time, we're taking deliberate actions to right size our cost structure and become a more efficient company.

Overall, I'm confident we will deliver on disciplined execution as we position the company for top tier growth by the end of the decade. Before I turn it over to David, I'll just say a few words on the current global operating climate. There's a lot of uncertainty whether related to tariffs, a potential economic downturn or restructuring at the FDA and HHS. This backdrop notwithstanding, our focus continues to be on building a strong and resilient company that can navigate and manage through operating complexities. We remain confident in our ability to deliver for our patients, employees and shareholders.

Our strategy is clear and we're executing. We have a rich pipeline with strong growth potential. We act swiftly when we see opportunities, whether it's business development to bring in great science or pursuing efficiencies in our business. And finally, we are laser focused on execution as you can see by our strong performance this quarter. With that, I'll turn it over to David.

Thank you, Chris, and good morning, everyone. Our performance in 2025 is off to a strong start. We are executing our growth strategy in terms of driving revenue for key products while also rightsizing our cost structure. Our persistent focus on execution is strengthening our foundation and positioning the company to deliver long term sustainable growth. This morning, I'll provide highlights of our performance in the first quarter and then review our outlook for the year.

Now turning to the first quarter on Slide seven. Total company revenues were approximately $11,200,000,000 reflecting strong demand across our growth portfolio, including the launch of Cobenefy, offset by the impact of generics and Medicare Part D redesign, primarily in our legacy portfolio. Global sales of the growth portfolio increased approximately 18%, led by key brands, including our IO portfolio, BRYONZI, REBLOZYL and KEMZIAZ. Turning to key product performance on Slide eight. Opdivo had a solid first quarter with global revenue up 12%, driven primarily by volume growth.

Separately, initial sales of Opdivo plus Yerventi were approximately $9,000,000 in the quarter. The U. S. Launch is progressing well with early adoption across multiple tumor types. We continue to believe that physicians will convert approximately thirty percent to forty percent of patients to this new product.

Let's turn to hematology on Slide nine. REBLOZEL global sales reflect a continued strength across first and second line MDS associated anemia. Higher sales in The U. S. Were related to increased use in first line setting.

Outside of The U. S, REBLOZYL's strong double digit sales growth was driven by demand across newly launched markets in Europe and Japan. In cell therapy, BRYANZI was another key contributor to our strong growth portfolio performance in the quarter, driven by demand across all indications. U. S.

Sales more than doubled and international sales tripled. Moving to cardiovascular on Slide 10, let's start with Kymzios. Sales in the first quarter nearly doubled, benefiting from strong global demand. Brand momentum in the quarter was driven by new patient starts and a 19% increase in total prescriptions for the three months ended March 31. We continue to expect steady growth of Kamsiyos in 2025 due to its compelling efficacy and safety profile in obstructive HCM.

Turning to Eliquis. Global sales were down 3% in the quarter, mainly due to the impact of Medicare Part D redesign in The U. S. We continue to expect total Eliquis revenue to be stronger in the second half of the year, primarily due to Part D redesign and elimination of the coverage gap. Moving to immunology on Slide 11.

Across our immunology portfolio, we saw higher commercial rebates, as previously discussed, related to improved access and Medicare Part D redesign. First quarter Certiktu sales reflected demand growth and gross to net impacts related to higher commercial rebates. We will continue to leverage our broader access position to drive further demand growth. Now moving to Slide 12. In its first full quarter on the market, Kobemzi is off to a solid start with sales of approximately $27,000,000 driven primarily by demand.

During the quarter, weekly total prescriptions remained strong, tracking ahead of all branded schizophrenia launch benchmarks. Now let's move to the P and L on Slide 13. Gross margin was approximately 73%, primarily due to product mix. Operating expenses were more than $500,000,000 lower compared to the same period last year, primarily reflecting the results of our strategic productivity initiative. Our effective tax rate in the quarter was 15.1%, primarily driven by earnings mix, and overall diluted earnings per share were $1.8 Turning to the balance sheet and capital allocation highlights on Slide 14.

Our financial position remains strong with approximately $12,100,000,000 in cash equivalents and marketable securities as of March 31. We generated cash flow from operations of approximately $2,000,000,000 in the first quarter. In terms of capital allocation, we maintain our strategic and balanced approach. As Chris highlighted earlier, business development remains a top priority, and we continue to actively assess opportunities in line with our strategy. And we remain on track with our plan to pay down $10,000,000,000 of debt relative to our 03/31/2024 balance.

Our capital allocations also include rewarding shareholders through the dividend. 2025 marks our ninety third consecutive year of dividend payments. In addition to strategically allocating capital, we are also driving operational excellence through our previously announced strategic productivity initiative. With respect to our 2025 expansion, we expect to realize approximately $2,000,000,000 in annual cost savings by the end of twenty twenty seven, and we remain on track to deliver $1,000,000,000 of these savings by the end of this year. Now turning to our outlook, starting with revenue on Slide 15.

We are increasing our full year revenue guidance to a range of approximately $45,800,000,000 to $46,800,000,000 reflecting strong performance of our growth portfolio, better than expected legacy sales in the first quarter and a favorable impact of approximately $500,000,000 related to foreign exchange rates relative to our previous 2025 guidance. Additionally, we now expect legacy portfolio to decline approximately 16% to 18% for the year, a more moderate rate than previously anticipated due primarily to Revlimid's strong Q1 performance. We now project full year sales of Revlimid to be at the top end of our previously guided range of $2,000,000,000 to $2,500,000,000 We maintain our gross margin guidance at approximately 72%. We continue to expect underlying operating expenses to be approximately 16,000,000,000 with an additional impact of about $200,000,000 due to foreign exchange rates. Expenses are now anticipated to be higher in the second half of the year compared to the first half, reflecting timing of investments.

Our operating margin target of approximately 37% for the full year remains unchanged. For OI and E, we now expect annual income of approximately 100,000,000 due to higher than anticipated royalties and favorable interest income. Although the first quarter tax rate was slightly lower than our full year projection, we are maintaining our full year tax rate guidance of 18%. As a result of these changes, we are raising the midpoint of our 2025 non GAAP EPS guidance by $0.15 per share with an expected range between $6.7 and $7 Our revised guidance includes the estimated impact of current tariffs on U. S.

Products shipped to China, but does not account for any potential pharmaceutical sector tariffs. In summary, our strong performance in the first quarter reflects our focus on disciplined execution. We are well positioned to manage the near term uncertainty in the macro environment while advancing our long term growth strategy. And with that, I'll now turn the call over to Chuck for Q and

And the first question will come from Chris Schott with JPMorgan. Please go ahead.

Great. Thanks so much. Maybe just two ones for me. Just first, bigger picture, as we think about tariffs and the two thirty two stuff that's going on right now, can you just provide any color on the company's U. Manufacturing footprint, ability

to shift manufacturing to The U. S. Over time and just in general your ability to navigate this dynamic? I know the details are lacking right now, but just maybe just help frame out how you're thinking about this. And then the second question for me was on Covenphy just in light of the adjunctive results we saw.

Just talk a little bit about what this does for your outlook on COBENTIA and just how you

think about kind of use in adjunctive given the negative trial results we saw? Thanks so much.

So thanks for the questions, Chris. I will start with your tariff question. I'll turn it over to Adam to address cobenefit. So first, let me just say at the outset that we certainly appreciate the administration's efforts to enhance U. S.

Manufacturing. As we think about the pharma sector, though, obviously, that needs to be done in a very thoughtful and deliberate way. And as you can appreciate, there's a lot that we don't know here. We don't have specifics on the outcome of this investigation. But our hope is that wherever this lands, we ultimately end up enhancing the competitiveness of U.

S. Companies like BMS. We are a significantly U. S.-based company today. We have been up investing in core infrastructure in The U.

S. For many years. So we need to ensure that ultimately our trade policies enhance the sector and support efforts like the ones we've been making. In terms of our exposure, again, what we've said is the tariffs that have gone into place, namely around China, have been reflected in the guidance that we provided today. It really is simply too early to provide a lot more on pharma specific sectors.

So we'll have to wait for the specifics there. And once we have them, obviously, we'll continue to update you. Adam, do you want to talk about COBENPY?

Sure. As Chris stated in his opening remarks, we don't expect these data to have a meaningful impact on cobenpi sales, Chris. Recall about seventy to eighty percent of patients are treated with monotherapy and clearly that's the most significant commercial opportunity and it's also the treatment goal for psychiatrists. What happens in the real world, psychiatrists exhaust monotherapy options before trying adjunctive use and that's after several failed monotherapy treatments happening later in third line, fourth line plus. Our focus is moving Coventry earlier in treatment.

That's exactly what we've been seeing in the market. In fact, roughly forty percent to fifty percent of the Coventry prescribing today is now in second line and third line. And so physicians have also told us both in research and through advisory boards that missing the endpoint of the study would have no impact on monotherapy usage or their willingness to use cobenefit particularly when you look at the safety of the study results. There's a significant unmet need that still exists for patients with schizophrenia and Coventry fills the need with its efficacy and safety profile and that's why we're seeing strong uptake in the market since launch with positive feedback from both physicians and for patients. So we're going to continue to execute our plan for Covanti to come to foundational monotherapy treatment and we have a clear opportunity to continue to drive significant growth.

Thanks, Adam. Operator, can we take our next question, please?

The next question will come from Mohit Bansal with Wells Fargo. Please go ahead.

Hey, thank you very much for taking my question. Chris, a big picture question for you. I mean, given that, I mean, there has been a lot of cost rationalization over a period of last couple of years. How are you thinking about R and D here? I mean, again, there have been a couple of setbacks here with melanoma and all.

But going forward, I mean, when you think about taking that, I mean, is there a change in the thought process? And how are you thinking about the future pipeline and riskiness of it? Thank you.

few things. And then obviously, just given the focus on R and D, Samit, you can certainly weigh in here. As you noted, we've been spending a lot of time over the last eighteen months focused on a few key things. First, making sure we're driving strong execution, that strong execution in commercial, but really across the enterprise. And I think you've seen the fruits of those efforts in terms of our performance last year and continuing in the Q1 performance.

Second, as you know, we've spent a lot of time focusing on making the organization more efficient and more agile. That was reflected in the cost optimization efforts we had last year as well as in the $2,000,000,000 initiative that we announced in our Q4 call. And then third, driving additional productivity coming out of R and D and importantly, on the swath of new opportunities we have coming out of our mid to late stage pipeline. And that's going to continue to be a focus. And as I step back and look at the opportunities for the company, the confidence that I have that we can deliver on the growth ambitions for the company, in part driven by our internal R and D pipeline remains absolutely unchanged.

It's important to keep in mind that while the two studies that read out over the last couple of weeks were certainly not the results that we had hoped for. As we said in our prepared remarks, they have no financial or modest financial impact on the company and no impact on the prospects for growth coming out of the decade. And so we're going to continue to stay focused on delivering against that pipeline. We're going to continue to invest in strong areas of science where we have the opportunity to add significant value and we can deliver on our mission for patients and for shareholders. And also keep in mind that we all we are in a very strong financial position.

That financial position gives us a lot of strategic flexibility to continue to source innovation externally, which will also be very much focused on from a capital allocation standpoint. Anything, Samit, you want add?

Yes. Just to add a couple of things, Chris. Thanks, Mohit, for the question. If we just were to put this into context, what has happened over the last five years since I've been here at least, we've had 43 major approvals since that time. So that speaks very loudly of the productivity of this organization and this is in the top quartile, ninetieth percentile actually if you look across the industry from a KMR data perspective.

Certainly the three setbacks that you talked about are very notable that we've taken into account from an R and D perspective, we learn from these. But what it does is now we have to look forward as the vision has already been created looking forward to 10 plus new molecular entities that we want to bring forward by the end of the decade and 30 plus new indications that we have planned for by the end of the decade. And they will start reading out now and we just started early, yes, but a small opportunity would be in myelofibrosis that will read out later this year. There is of course ADAPT which is very eagerly awaited by everyone just like us. And then in 2026 there's a slew of readouts for new molecular entities.

So we are well planned for that one and looking forward to just growing the portfolio from there

next question will come from Luisa Hector with Berenberg. Please go ahead.

Maybe just another question on KOBENSKI. Just wondering how the readout from ARRISE impacts your levels of confidence in Alzheimer's psychosis readout and perhaps any additional trials that you may be planning? Thanks,

Yes. Thanks, Luisa, the question. Our eyes data has no impact as we think about Alzheimer's disease psychosis. There are a few reasons for that. One, obviously the disease is very different.

Two, Alzheimer's disease overall plan in psychosis as well as future looking cognition impairment and agitation. Those are based on the data that have already been generated many years ago, a couple of decades ago for zenomeline, which showed statistically significant benefits in the behavioral patterns in patients with Alzheimer's disease. Also from a design perspective, in Alzheimer's disease psychosis, there's a longer duration of treatment of up to twelve weeks, which is obviously going to be beneficial as we think about observation of output for primary and secondary endpoints. So overall, confident in the conduct of our studies. And as you know, we are also initiating several studies, as Chris spoke about earlier, seven different Phase III trials this year.

So really looking forward to initiation of that program.

The next question will come from Geoff Meacham with Citi.

Chris, just got a couple for you, another one on tariffs. Maybe if you could just talk about at a high level the flexibility of transfer price assumptions, either maybe from an IP or tax or side of manufacturing. I wasn't sure also about your ability to step up inventory as a potential strategy as well? And then second, on BD, just given recent deals for Chinese assets, but also how low valuations are across U. S.

SMID biotech, How do these factor in your strategy, urgency, etcetera? Thanks so much.

Thanks for the questions, Jeff. Hope you're doing well. I will start and then I will ask David to chime in a bit on the transfer pricing component of your tariff question.

Obviously, as I said earlier, we've got a lot that we still have to wait and see that comes down with respect to the impact of any pharma industry sector tariffs. We appreciate the fact that the administration is taking time to study this issue. You know well, Jeff, that in this industry, our manufacturing networks are incredibly complex. They're global supply chains. You have inputs coming from all over the world.

There are long lead times in terms of making changes to the supply chain. Manufacturing processes are highly complex. And certainly with respect to BMS, the medicines that we make are critical for patients and can't be easily substituted. Having said that, in anticipation of potential tariffs, we continue to execute mitigation efforts. We have a broad global manufacturing network where we're looking for opportunities to optimize with tariffs in mind.

As I mentioned, we already have a significant presence in The U. S. And we're continuing efforts to reduce risk of disruption and shortages as a result of efforts like onshoring. And we're going to continue those efforts. We're also going to continue to engage with the administration to ensure that ultimately whatever comes down is well thought through and deliberate in terms of how we move forward.

But David, anything you want to comment on transfer pricing? And then I'll come back to BD.

Yes. So Jeff, thanks for the question. BMS, we have a really broad manufacturing network, both in The U. S. And globally, and we're not overly reliant on any single country in terms of our supply chain.

The situation related to tariffs continues to evolve, and we're closely assessing. We have a cross functional team in place that's evaluating the flexibility and we have a tremendous amount of flexibility to be able to move our manufacturing around should any potential tariffs come up. As we learn more and there's more specifics, obviously, we'll update you when that becomes known. But as Chris said previously, we continue to ensure the administration as well as policymakers understand the impact of these tariffs and as well as any potential future actions both on patients as well as industry.

And then, Jeff, with respect to business development, business development is our top capital allocation priority. That includes both partnerships and acquisitions. And of course, as you note, we're going to source that innovation from wherever it comes. And there's certainly a lot of exciting innovation taking place in China. We're going to be focused on a few things though.

We're going to be focused on strengthening our position in the core TAs that we operate in. That's bringing in promising areas of science, assets where we can improve the growth profile of the company. And what's important is that we like the science and we feel we're the rightful owners. The financials make sense. And again, that's strengthening the growth profile in key areas.

And we believe that we can drive value for the company and shareholders. And if we hit those criteria, then we certainly have the financial ability to execute and move quickly.

The next question will come from Evan Seigerman with BMO Capital. Please go ahead.

Hi, guys. Thank you so much for taking my question. I wanted to touch on the rumblings we're hearing about the potential implementation of most favored nations pricing potentially with regard to drug price negotiation in the IRA. I guess, what are you hearing? And more importantly, what's your stance on how that could impact negotiations for IRA drug prices going forward?

And then secondary, I'd love to touch on the potential impact positive impact of relaxed cardiac monitoring for KEMZIAOS and how this could help accelerate sales with that franchise?

Well, let me start, Evan. Thanks for the questions. And then I will turn it over to Adam on the second part of your question. Clearly, with respect to MFN and international reference pricing, there's a lot of focus here. I think the President and the administration is rightfully focused on the differential between U.

S. And ex U. S. Net pricing. The way we think about it is, I think you have to look at both sides of that equation.

With respect to ex U. S. Net prices, we actually agree with the administration. Countries outside of The U. S.

Need to be allocating more healthcare spending to innovative medicines. So we're engaging directly with the administration, working with our pharma partners, of course, and supporting the administration's efforts here to leverage whatever tools they can to get ex U. S. Countries to allocate more of their healthcare spending to the types of innovative medicines that we develop at BMS. In terms of The U.

S. Pricing environment, I think our perspective really is unchanged here. We have to address the complexity of The U. S. Healthcare system.

Dollars $0.06 5 of every dollar spent on pharmaceutical products in The U. S. Goes to middlemen. These are entities that don't discover, develop or deliver medicines to patients. These are entities that because of their market power also have control over what patients pay in terms of co pays.

And there are ample opportunities to make that system more complex and ensure that ultimately any rebates that we provide as industry are ultimately go to improve what patients ultimately have to pay for medicines. Beyond that, I would say, we continue to be focused on addressing other aspects of health care, notably fixing some of the more egregious aspects of IRA, the pill penalty and addressing spillover risk on top of mind there. And of course, we continue to be very focused on and concerned about abuses in the 340B program and that's going to be a big focus area of ours as well. Adam, do you want

to take the second part of that question?

Yes. Thanks, Evan, for the question. So we've continued to deliver strong growth for CAMZIO's. We virtually doubled sales versus prior year in the quarter. And our goal has been to ease the burden of echo requirements for both patients and physicians and based on our long term clinical data as well as the robust data collection, our label change reflects the FDA's confidence in the safety and efficacy of Kamsiyos now with over 15,000 patients prescribed Kamsiyos in The United States.

So the label has been updated to reduce the frequency of echo monitoring for patients taking Kamsiyos from every twelve weeks, now to once every six months in the maintenance phase. And this is going to number one simplify processes for both patients and physicians. Number two is going to open up additional capacity at the COEs and as a result, physicians are going be able to treat more patients, it reduces the burden on patients and physicians time and alleviates resourcing at the COEs. I will say that we're just super early in the launch, but early customer feedback has been very positive since the label change and taken together we're seeing good momentum for Kamsiyos and we expect continued strong growth.

Thanks for the background, Adam. Next question please.

Your next question will come from Terence Flynn with Morgan Stanley. Please go ahead.

Great. Thanks for taking the questions. I guess, maybe two for me. First on the COBENFI launch, Adam, I was just wondering if you could elaborate a little bit on what you're seeing with the prescriber base right now in terms of kind of breadth and depth. And then I know the slides also mentioned some onetime gross to net impact in the first quarter.

So just wondering if you could elaborate on that and how we should think about the cadence of gross to net over the course of the year? And then David was just I know you're not going to give 2026 guidance yet at this point, but again heard you reiterate the 37% op margin for 2025. But just directionally, how should we think about 2026 as it seems like there are still a number of moving pieces as we think about next year? Thank you.

Thanks for the questions, Terence. Adam and David.

Yes. Thanks, Terence. So we're very pleased with Coventry's launch performance. The launch is off to a strong start. We're now over 1,600 TRxs per week and it's tracking ahead of all branded schizophrenia launch benchmarks.

We've made very good progress achieving Medicaid and Medicare access. We're now at virtually 100 access across both channels and we're making good progress with commercial payers. I mentioned earlier that because of this access, it's allowing us to move Coventry up earlier in treatment, which is critical. And most importantly, are hearing very encouraging feedback from both patients and physicians around

Bristol-Myers Squibb (BMY) Q1 2025 Earnings Call Transcript

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