Bristol-Myers Squibb(BMY) - 2022 Q4 - Annual Report

Business Operations - The company operates in the biopharmaceutical segment, focusing on oncology, hematology, immunology, cardiovascular, and neuroscience[5] - Significant manufacturing operations are located in the U.S., Puerto Rico, Ireland, and Switzerland[5] - The company competes with global research-based drug companies, smaller research firms, and generic drug manufacturers[5] - The company manages its R&D programs on a product portfolio basis, ensuring a balance of early-stage and late-stage programs to support future growth[46] Financial Performance - Total revenues for the year ended December 31, 2022, were $46,159 million, a slight decrease from $46,385 million in 2021[6] - Revenue distribution: 69% from the United States, 29% from international markets, and 2% from other sources[6] - R&D expenses were $9.5 billion in 2022, $10.2 billion in 2021, and $10.0 billion in 2020, with a significant charge of $11.4 billion in 2020 due to the MyoKardia acquisition[45] Research and Development - The company is committed to advancing its early, mid, and late-stage pipeline through disciplined business development[5] - The company focuses its R&D efforts on oncology, hematology, immunology, cardiovascular diseases, and fibrotic diseases, with a pipeline that includes small molecules, biologics, and gene therapies[40] - The oncology pipeline includes multiple investigational compounds across various phases, including OPDIVO and YERVOY combinations for solid tumors and metastatic cancers[52] - The immunology pipeline features investigational compounds like SOTYKTU (deucravacitinib) for conditions such as Crohn's Disease and Psoriatic Arthritis[54] - The cardiovascular pipeline includes CAMZYOS (mavacamten) for heart failure with preserved ejection fraction and non-obstructive hypertrophic cardiomyopathy[56] Product Portfolio and Market Exclusivity - The pharmaceutical products include small molecule drugs, biologics, and CAR-T therapies, with a focus on innovative treatments[9] - The company holds numerous patents and trademarks, which are crucial for maintaining market exclusivity for its products[16] - The estimated minimum market exclusivity date for Eliquis (apixaban) is 2026 in the U.S., 2026 in the EU, and 2026 in Japan[37] - The company’s marketed biologic products include Opdivo, Orencia, Yervoy, and Empliciti, with varying market exclusivity dates[28] Manufacturing and Facilities - The company is expanding its manufacturing capabilities with new R&D facilities planned in Cambridge, Massachusetts (2023) and San Diego, California (2025) alongside new cell therapy manufacturing facilities in Devens, Massachusetts and Leiden, Netherlands[47] - The FDA approved a large-scale biologics manufacturing facility in Cruiserath, Ireland in December 2019, and the EU approval followed in January 2020[98] - The company is investing in new facilities for CAR-T cell therapy manufacturing and plans to transition to new vector technologies with a dual sourcing strategy[98] Competition and Market Challenges - The company faces intense competition in the immuno-oncology market, particularly for products like Opdivo, which competes with both existing and new therapies[72] - The competitive landscape includes challenges from generic manufacturers, particularly after the expiration of market exclusivity, which can lead to rapid revenue declines[73] - The company faces increasing pricing pressures due to government regulations, including the Inflation Reduction Act of 2022, which may further reduce drug costs for federal programs[78] Pricing and Access Strategies - Pricing strategies are based on the clinical value of innovations and aim to enhance patient access while sustaining investment in R&D[77] - The company actively pursues new pricing approaches and patient support programs to optimize access to medicines[77] - The company has generally succeeded in having its major products included on MCO or pharmacy benefit manager (PBM) formularies, which is crucial for market access[79] Regulatory Environment - The company is subject to extensive global regulations that govern the testing, approval, and marketing of its products, which can delay product introductions[82] - The FDA's regulatory review process is resource-intensive, and improvements in efficiency could expedite the availability of new therapies[83] - The company must comply with stringent cGMP regulations, and failure to do so could result in significant legal and operational consequences[85] Workforce and Diversity - As of December 31, 2022, the company had approximately 34,300 employees in 44 countries, with 60% located in the U.S.[107] - The company maintains a Global Inclusion & Diversity strategy, with over 12,200 unique members across 200+ chapters in 41 countries as of December 31, 2022[112] - In 2022, over 6,800 employees enrolled in professional, manager, and leadership development programs, supporting the company's commitment to employee growth[114] Foreign Exchange and Credit Risk - The company is exposed to significant foreign exchange risk, primarily with the euro and Japanese yen, affecting revenues, earnings, and cash flow[329] - The company uses cross-currency interest rate swap contracts to manage risks from long-term debt denominated in euros[332] - The company has a policy to invest only in institutions that meet high credit quality standards to minimize credit risk[333]