Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

101K characters. Original on sec.gov · Markdown

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related footnotes included elsewhere in this Quarterly Report on Form 10-Q to enhance the understanding of our results of operations, financial condition and cash flows.

EXECUTIVE SUMMARY

Our principal strategy is to combine the resources, scale and capability of a large pharmaceutical company with the speed, agility and focus on innovation typically found in the biotech industry. Our priorities are (i) to continue to renew and diversify our portfolio through launching new medicines, (ii) advancing our early, mid and late-stage pipeline, and (iii) executing disciplined business development. Our focus is on discovering, developing and delivering transformational medicines for patients facing serious diseases in the following five core therapeutic areas: (i) oncology with a priority in certain tumor types, including diversification beyond IO; (ii) hematology with opportunities to expand leadership position in multiple myeloma, as well as broaden our portfolio across leukemias, lymphomas and non-malignant hematologic diseases; (iii) immunology with a focus in dermatology, rheumatology and gastrointestinal disorders, establishing new standards of care in pulmonology and rapidly advancing cell therapy into immunology diseases; (iv) cardiovascular diseases with focus on cardiomyopathies, heart failures and thrombotic diseases; and (v) neuroscience with a focus on neuropsychiatry, neurodegenerative and neuroinflammation diseases. We are working on accelerating our drug development and delivery of our innovative medicines to patients, enhancing our commercial operating model, as well as enhancing flexibility and reliability of our manufacturing network. We remain committed to strategic business development and maintaining a strong investment grade credit rating, growing the dividend and reducing additional debt that was issued in support of recent transactions during the first quarter of 2024. For further information on our strategy, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Strategy" in our 2023 Form 10-K. Refer to the Summary of Abbreviated Terms at the end of this Quarterly Report on Form 10-Q for terms used throughout the document.

In 2024, we achieved significant advances in CAR-T cell therapy with the approval of Breyanzi in the U.S. for adults with relapsed or refractory CLL/SLL, follicular lymphoma and mantle cell lymphoma; and Abecma in the U.S. and EU for triple-class exposed relapsed and refractory multiple myeloma after two or more prior lines of therapy. In addition, Reblozyl received expanded approval to include the first-line treatment of adult patients with transfusion-dependent anemia due to very low, low and intermediate-risk myelodysplastic syndromes in the EU and Japan. In oncology, we received (i) accelerated approval in the U.S. of Krazati in combination with cetuximab as a targeted treatment option for adult patients with KRASG12C-mutated locally advanced or metastatic colorectal cancer; (ii) approval in the U.S. of Augtyro for the treatment of patients with NTRK-positive locally advanced or metastatic solid tumors; and (iii) both in the U.S. and EU, approval of Opdivo in combination with cisplatin and gemcitabine for first-line treatment of adult patients with unresectable or metastatic muscle invasive urothelial carcinoma. Refer to "—Product and Pipeline Developments" for additional updates on our pipeline.

Additionally, we completed the following acquisitions in 2024: (i) Karuna, a biopharmaceutical company in the area of developing and delivering psychiatric and neurological conditions medicines; (ii) RayzeBio, a clinical-stage radiopharmaceutical therapeutics company with a pipeline of potentially first-in-class and best-in-class drug development programs, and (iii) Mirati, a commercial stage targeted oncology company, with a commercialized medicine, Krazati, in addition to a pipeline of clinical and pre-clinical stage oncology assets. BMS also entered into a strategic collaboration with SystImmune, to co-develop and co-commercialize BL-B01D1, a bispecific topoisomerase inhibitor-based anti-body drug conjugate, which is currently being evaluated in a Phase I clinical trial for metastatic or unresectable NSCLC and is also in development for breast cancer and other tumor types. We also entered into a worldwide capacity reservation and supply agreement with Cellares for the manufacturing of CAR-T cell therapies. This agreement is expected to enable us to expand our manufacturing capacity through a platform that is scalable and has the potential to improve turnaround time. For additional information relating to our acquisitions, divestitures, licensing and other arrangements refer to "Item 1. Financial Statements—Note 3. Alliances" and "Item 1. Financial Statements—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements".

We remain committed to the strategic allocation of resources and investing in areas that maximize value and drive sustainable growth. In the first half of 2024, we began to execute a strategic productivity initiative that will drive approximately $1.5 billion in annual cost savings by the end of 2025, the majority of which are expected to be reinvested to fund innovation and drive growth. As a result, we are focusing resources on R&D programs with the potential to deliver the greatest return on investment, prioritizing investments in key growth brands, and optimizing operations across the organization. The exit costs resulting from these actions are included in our updated 2023 Restructuring Plan.

Financial Highlights

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions, except per share data2024202320242023
Total Revenues$12,201$11,226$24,066$22,563
Diluted (loss)/earnings per share
GAAP$0.83$0.99$(5.05)$2.06
Non-GAAP2.071.75(2.33)3.80

Revenues increased by 9% during the second quarter of 2024 and 7% year-to-date due to the Growth Portfolio and Eliquis, partially offset by Revlimid.

The $0.16 decrease in GAAP EPS for the second quarter of 2024 was primarily driven by the impact of certain specified items, including intangible asset impairments, and higher interest expense resulting from the recent acquisitions, partially offset by higher revenues. After adjusting for specified items, the $0.32 increase in non-GAAP EPS was primarily due to higher revenues partially offset by higher interest expense resulting from the debt associated with recent acquisitions and lower royalty income.

The $7.11 decrease in GAAP EPS year-to-date was primarily driven by higher one-time Acquired IPRD charges primarily from the Karuna asset acquisition and SystImmune collaboration ($6.29) and the impact of certain specified items, including intangible asset impairments, as well as the cash settlement of unvested stock awards. After adjusting for specified items, the $6.13 decrease in non-GAAP EPS was primarily due to the above mentioned Acquired IPRD charges, higher interest expense resulting from the recent acquisitions and lower royalty income, partially offset by higher revenues.

Our non-GAAP financial measures, including non-GAAP earnings and related EPS information, are adjusted to exclude specified items that represent certain costs, expenses, gains and losses and other items impacting the comparability of financial results. For further information and reconciliations relating to our non-GAAP financial measures refer to "—Non-GAAP Financial Measures."

Economic and Market Factors

Governmental Actions

Our products continue to be subject to increasing pressures across the portfolio from pharmaceutical market access and pricing controls and discounting, changes to tax and importation laws and other restrictions in the U.S., the EU and other regions around the world that result in lower prices, lower reimbursement rates and smaller populations for whom payers will reimburse, which can negatively impact our results of operations (including intangible asset impairment charges), operating cash flow, liquidity and financial flexibility. The IRA directs (i) the federal government to “negotiate” prices for select high-cost Medicare Part D (beginning in 2026) and Part B (beginning in 2028) drugs that are more than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation and (iii) Medicare Part D redesign replacing the current Part D CGDP and establishes a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs up to the $2,000 cap and 20% after that cap is reached. In August 2023, Eliquis was selected as one of the first 10 medicines subject to "negotiation" for government-set prices beginning in 2026, and it is possible that more of our products could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiry of intellectual property protections.

In addition, in December 2023, the Biden Administration released a proposed framework that for the first time proposed that a drug’s price can be a factor in determining that the drug is not accessible to the public and therefore that the government could exercise “march-in rights” and license it to a third party to manufacture. We cannot predict whether a final rule will be adopted along the lines proposed and, if adopted, whether the government would seek to exercise march-in rights for any of our products. Other proposals and potential executive orders focused on drug pricing remain possible. The effect of reducing prices and reimbursement for certain of our products would significantly impact our business and consolidated results of operations.

At the state level, multiple states have passed, are pursuing or are considering government actions, legislation or proposals to change drug pricing and reimbursement (e.g., establishing prescription drug affordability boards, implementing manufacturer mandates tied to the Federal Public Health Service drug pricing program, etc.). Some of these state-level government actions, legislation and proposals may also influence federal and other state policies and legislation. Given the current uncertainty surrounding the adoption, timing and implementation of many of these measures, as well as pending litigation challenging such laws, we are unable to predict their full impact on our business. However, such measures could modify or decrease access, coverage, or reimbursement of our products, or result in significant changes to our sales or pricing practices, which could have a material impact on our revenues and results of operations. With respect to the Federal Public Health Service drug pricing program, eight states have enacted laws regulating manufacturer pricing obligations under the program. Several additional states are considering similar potential legislation or other government actions, and we expect other states may do the same in the future.

Additionally, in connection with the IRA, the following changes have been made to U.S. tax laws, including (i) a 15% minimum tax that generally applies to U.S. corporations on adjusted financial statement income beginning in 2023 and (ii) a non-deductible 1% excise tax provision on net stock repurchases, to be applied to repurchases beginning in 2023. We continue to evaluate the impact of the IRA on our results of operations and it is possible that these changes may result in a material impact on our business and results of operations. Furthermore, countries are in the process of enacting changes to their tax laws to implement the agreement by the OECD to establish a global minimum tax. See risk factors on these items included under "Part I—Item 1A. Risk Factors—Product, Industry and Operational Risks—Increased pricing pressure and other restrictions in the U.S. and abroad continue to negatively affect our revenues and profit margins" and "—Changes to tax regulations could negatively impact our earnings" in our 2023 Form 10-K.

Significant Product and Pipeline Approvals

The following is a summary of the significant approvals received in 2024 as of July 26, 2024:

ProductDateApproval
KrazatiJune 2024FDA accelerated approval for Krazati in combination with cetuximab as a targeted treatment option for adult patients with KRASG12C-mutated locally advanced or metastatic colorectal cancer, as determined by an FDA-approved test, who have received prior treatment with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy.
AugtyroJune 2024FDA accelerated approval of Augtyro for the treatment of adult and pediatric patients 12 years of age and older with solid tumors that have a neurotrophic tyrosine receptor kinase gene fusion, are locally advanced or metastatic or where surgical resection is likely to result in severe morbidity, and have progressed following treatment or have no satisfactory alternative therapy.
OpdivoMay 2024EC approved Opdivo in combination with cisplatin and gemcitabine for the first-line treatment of adult patients with unresectable or metastatic urothelial carcinoma.
BreyanziMay 2024FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory mantle cell lymphoma who have received at least two prior lines of systemic therapy, including a Bruton tyrosine kinase inhibitor.
BreyanziMay 2024FDA accelerated approval of Breyanzi for the treatment of adult patients with relapsed or refractory follicular lymphoma who have received at least two prior lines of systemic therapy.
AbecmaApril 2024FDA approval of Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma after two or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.
ReblozylApril 2024EC expanded approval of Reblozyl to include the first-line treatment of adult patients with transfusion-dependent anemia due to very low, low and intermediate-risk myelodysplastic syndromes.
AbecmaMarch 2024EC approval of Abecma for the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least two prior therapies, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 antibody and have demonstrated disease progression on the last therapy.
BreyanziMarch 2024FDA accelerated approval of Breyanzi for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia or small lymphocytic lymphoma who have received at least two prior lines of therapy, including a Bruton tyrosine kinase inhibitor and a B-cell lymphoma 2 inhibitor.
OpdivoMarch 2024FDA approval of Opdivo, in combination with cisplatin and gemcitabine, for the first-line treatment of adult patients with unresectable or metastatic UC.
ReblozylJanuary 2024Japan's Ministry of Health, Labour and Welfare approval of Reblozyl for the treatment of anemia associated with myelodysplastic syndrome.

Refer to "—Product and Pipeline Developments" for a listing of other developments in our marketed products and late-stage pipeline since the start of the second quarter of 2024.

Acquisitions, Divestitures, Licensing and Other Arrangements

Refer to "Item 1. Financial Statements—Note 3. Alliances" and "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements" for information on significant acquisitions, divestitures, licensing and other arrangements.

RESULTS OF OPERATIONS

Regional Revenues

The composition of the changes in revenues was as follows:

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions20242023% ChangeForeign Exchange**(b)**20242023% ChangeForeign Exchange**(b)**
United States$8,801$7,80413%N/A$17,277$15,75610%N/A
International3,2243,247(1)%(7)%6,4146,477(1)%(5)%
Other(a)1761751%N/A37533014%N/A
Total$12,201$11,2269%(2)%$24,066$22,5637%(1)%

(a) Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations.

(b) Foreign exchange impacts were derived by applying the prior period average currency rates to the current period sales.

United States

  • U.S. revenues increased 13% during the second quarter of 2024 and 10% year-to-date primarily due to higher demand for the Growth and Legacy Portfolios, partially offset by Abecma and Revlimid. Average U.S. net selling prices decreased 1% year-to-date compared to the same period a year ago.

International

  • International revenues decreased 1% for both the second quarter of 2024 and year-to-date due to foreign exchange impacts and lower demand for the Legacy Portfolio, partially offset by higher demand for the Growth Portfolio. The negative foreign exchange impact of 7% during the second quarter and 5% year-to-date was primarily attributed to the devaluation of the Argentine peso, which was mostly offset by inflation-related local currency price increases.

Beginning in 2024, Puerto Rico revenues are presented as part of International revenues to align with management's review of the Company's financial results. Prior period amounts have been recast to conform to the current presentation. No single country outside the U.S. contributed more than 10% of total revenues during the six months ended June 30, 2024 and 2023. Our business is typically not seasonal.

GTN Adjustments

The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as follows:

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions20242023% Change20242023% Change
Gross product sales$20,780$18,11115%$40,075$35,39913%
GTN adjustments
Charge-backs and cash discounts(2,843)(2,279)25%(5,399)(4,370)24%
Medicaid and Medicare rebates(3,864)(3,143)23%(6,948)(5,625)24%
Other rebates, returns, discounts and adjustments(2,148)(1,772)21%(4,244)(3,439)23%
Total GTN adjustments(8,855)(7,194)23%(16,591)(13,434)24%
Net product sales$11,925$10,9179%$23,484$21,9657%
GTN adjustments percentage42%40%2%41%38%3%
U.S.48%45%3%46%43%3%
Non-U.S.20%20%—%21%19%2%

Reductions/(increases) to provisions for product sales made in prior periods resulting from changes in estimates were ($19 million) and $61 million for the three and six months ended June 30, 2024 and $11 million and $98 million for the three and six months ended June 30, 2023, respectively. GTN adjustments are primarily a function of product sales volume, regional and payer channel mix, contractual or legislative discounts and rebates. U.S. GTN adjustments percentage increased primarily due to product mix and higher government channel rebates.

Product Revenues

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions20242023% Change20242023% Change
Growth Portfolio
Opdivo$2,387$2,14511%$4,465$4,3473%
U.S.1,4061,22115%2,5612,5022%
Non-U.S.9819246%1,9041,8453%
Orencia9489272%1,7461,6913%
U.S.7426957%1,3141,2465%
Non-U.S.206232(11)%432445(3)%
Yervoy6305858%1,2131,09311%
U.S.40436810%77268014%
Non-U.S.2262174%4414137%
Reblozyl42523482%77944077%
U.S.34817896%64133492%
Non-U.S.775638%13810630%
Opdualag23515453%44127163%
U.S.22315148%42126758%
Non-U.S.123*204*
Abecma95132(28)%177279(37)%
U.S.54115(53)%106233(55)%
Non-U.S.4117*714654%
Zeposia15110051%26117847%
U.S.1117352%18312448%
Non-U.S.402748%785444%
Breyanzi15310053%26017152%
U.S.1228347%20914148%
Non-U.S.311782%513070%
Camzyos13946*22375*
U.S.13046*20775*
Non-U.S.9—N/A16—N/A
Sotyktu5325*9741*
U.S.412471%753992%
Non-U.S.121*222*
Augtyro7—N/A13—N/A
U.S.7—N/A13—N/A
Non-U.S.——N/A——N/A
Krazati32—N/A53—N/A
U.S.29—N/A50—N/A
Non-U.S.3—N/A3—N/A
Other Growth Products(a)34129516%66057515%
U.S.1681624%3163063%
Non-U.S.17313330%34426928%
Total Growth Portfolio$5,596$4,74318%$10,388$9,16113%
U.S.3,7853,11621%6,8685,94715%
Non-U.S.1,8111,62711%3,5203,21410%
Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions20242023% Change20242023% Change
Legacy Portfolio
Eliquis$3,416$3,2047%$7,136$6,6278%
U.S.2,5442,31110%5,3654,83811%
Non-U.S.872893(2)%1,7711,789(1)%
Revlimid1,3531,468(8)%3,0223,218(6)%
U.S.1,1651,219(4)%2,6182,742(5)%
Non-U.S.188249(24)%404476(15)%
Pomalyst/Imnovid95984713%1,8241,6799%
U.S.71656527%1,3131,10619%
Non-U.S.243282(14)%511573(11)%
Sprycel424458(7)%798887(10)%
U.S.3413236%6236122%
Non-U.S.83135(39)%175275(36)%
Abraxane231258(10)%448497(10)%
U.S.154187(18)%299348(14)%
Non-U.S.77718%149149—%
Other Legacy Products(b)222248(10)%450494(9)%
U.S.968316%19116317%
Non-U.S.126165(24)%259331(22)%
Total Legacy Portfolio$6,605$6,4832%$13,67813,4022%
U.S.5,0164,6887%10,4099,8096%
Non-U.S.1,5891,795(11)%3,2693,593(9)%
Total Revenues$12,201$11,2269%$24,066$22,5637%
U.S.8,8017,80413%17,27715,75610%
Non-U.S.3,4003,422(1)%6,7896,807—%
  • Change in excess of 100%.

(a) Includes Onureg, Inrebic, Nulojix, Empliciti and royalty revenues.

(b) Includes other mature brands.

Growth Portfolio

Opdivo (nivolumab) — a fully human monoclonal antibody that binds to the PD-1 on T and NKT cells. It has been approved for several anti-cancer indications including bladder, blood, CRC, head and neck, RCC, HCC, lung, melanoma, MPM, stomach and esophageal cancer. The Opdivo+Yervoy regimen also is approved in multiple markets for the treatment of NSCLC, melanoma, MPM, RCC, CRC and various gastric and esophageal cancers. There are several ongoing potentially registrational studies for Opdivo across other tumor types and disease areas, in monotherapy and in combination with Yervoy and various anti-cancer agents.

  • U.S. revenues increased 15% during the second quarter of 2024 primarily due to higher average net selling prices, higher demand and timing of sales channel inventory and customer orders.

  • U.S. revenues increased 2% year-to-date primarily due to higher average net selling prices.

  • International revenues increased 6% during the second quarter of 2024 and 3% year-to-date primarily due to higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts of 12% and 10%, respectively. Excluding foreign exchange impacts, revenues increased 18% and 13%, respectively.

Orencia (abatacept) — a fusion protein indicated for adult patients with moderate to severe active RA and PsA and is also indicated for reducing signs and symptoms in certain pediatric patients with moderately to severely active polyarticular JIA and for the treatment of aGVHD, in combination with a calcineurin inhibitor and methotrexate.

  • U.S. revenues increased 7% during the second quarter of 2024 and 5% year-to-date primarily due to higher demand, partially offset by lower average net selling prices.

  • International revenues decreased 11% during the second quarter of 2024 due to foreign exchange impacts of 9%. Excluding foreign exchange impacts, revenues decreased by 2%.

  • International revenues decreased 3% year-to-date due to foreign exchange impacts of 8%, partially offset by higher demand. Excluding foreign exchange impacts, revenues increased 5%.

  • BMS is not aware of any Orencia biosimilars on the market in the U.S., EU and Japan. Formulation and additional patents expire in 2026 and beyond.

Yervoy (ipilimumab) — a CTLA4 immune checkpoint inhibitor. Yervoy is a monoclonal antibody for the treatment of patients with unresectable or metastatic melanoma. The Opdivo+Yervoy regimen is approved in multiple markets for the treatment of NSCLC, melanoma, MPM, RCC, CRC and esophageal cancer.

  • U.S. revenues increased 10% during the second quarter of 2024 and 14% year-to-date due to higher average net selling prices and higher demand.

  • International revenues increased 4% during the second quarter of 2024 and 7% year-to-date due to higher demand, partially offset by foreign exchange impacts of 7% in both periods. Excluding foreign exchange impacts, revenues increased by 11% and 14%, respectively.

Reblozyl (luspatercept-aamt) — an erythroid maturation agent indicated for the treatment of anemia in adult patients with lower risk myelodysplastic syndrome and beta thalassemia.

*•*U.S. revenues increased 96% during the second quarter of 2024 and 92% year-to-date driven by higher demand due to a first line label extension in August 2023.

Opdualag (nivolumab and relatlimab-rmbw) — a combination of nivolumab, a PD-1 blocking antibody, and relatlimab, a LAG-3 blocking antibody, indicated for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma.

*•*U.S. revenues increased 48% during second quarter of 2024 and 58% year-to-date primarily due to higher demand.

Abecma (idecabtagene vicleucel) — a BCMA genetically modified autologous CAR–T cell therapy indicated for the treatment of adult patients with relapsed or refractory multiple myeloma after two or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-cyclic ADP ribose hydrolase monoclonal antibody.

*•*U.S. revenues decreased 53% during the second quarter of 2024 and 55% year-to-date due to increased competition in BCMA targeted therapies.

Zeposia (ozanimod) — an oral immunomodulatory drug used to treat relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease, in adults and to treat moderately to severely active UC in adults.

*•*U.S. revenues increased 52% during the second quarter of 2024 and 48% year-to-date primarily due to higher demand.

Breyanzi (lisocabtagene maraleucel) — a CD19-directed genetically modified autologous CAR-T cell therapy indicated for the treatment of adult patients with relapsed or refractory LBCL after one or more lines of systemic therapy, including DLBCL not otherwise specified, high-grade B-cell lymphoma, primary mediastinal LBCL, grade 3B FL and relapsed or refractory FL after at least two prior lines of systemic therapy, relapsed or refractory CLL or SLL , and relapsed or refractory MCL in patients who have received at least two prior lines of systemic therapy, including a Bruton tyrosine kinase inhibitor and a B-cell lymphoma 2 inhibitor.

*•*U.S. revenues increased 47% during the second quarter of 2024 and 48% year-to-date primarily due to higher demand enabled by expanded manufacturing capacity.

Camzyos (mavacamten) — a cardiac myosin inhibitor indicated for the treatment of adults with symptomatic obstructive HCM to improve functional capacity and symptoms. Camzyos was launched in April 2022.

*•*U.S. revenues increased more than 100% during the second quarter of 2024 and year-to-date, primarily due to higher demand.

Sotyktu (deucravacitinib) — an oral, selective, allosteric tyrosine kinase 2 inhibitor indicated for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy. Sotyktu was launched in September 2022.

*•*U.S. revenues increased 71% during the second quarter of 2024 and 92% year-to-date, primarily due to higher demand, partially offset by lower average net selling prices.

Augtyro (repotrectinib) — a kinase inhibitor indicated for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC and for the treatment of adult and pediatric patients 12 years of age and older with solid tumors that have NTRK gene fusion, are locally advanced or metastatic or where surgical resection is likely to result in severe morbidity, and have progressed following treatment or have no satisfactory alternative therapy. Augtyro was launched in November 2023.

Krazati (adagrasib) — a highly selective and potent oral small-molecule inhibitor of the KRASG12C mutation, indicated for the treatment of adult patients with KRASG12C-mutated locally advanced or metastatic NSCLC, as determined by an FDA-approved test, who have received at least one prior systemic therapy and for the treatment of adult patients with KRASG12C-mutated locally advanced or metastatic CRC, as determined by an FDA-approved test, who have received prior treatment with fluoropyrimidine-, oxaliplatin-, and irinotecan-based chemotherapy. Krazati was brought into the BMS portfolio as part of the Mirati acquisition completed in 2024.

Other Growth Brands — includes Onureg, Inrebic, Nulojix, Empliciti and royalty revenues.

Legacy Portfolio

Eliquis (apixaban) — an oral Factor Xa inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE and reduction in risk of recurrence following initial therapy.

*•*U.S. revenues increased 10% during second quarter of 2024 and 11% year-to-date primarily due to higher demand.

*•*International revenues decreased 2% during the second quarter of 2024 and 1% year-to-date primarily due to foreign exchange impacts of 2% and 1%, respectively. Excluding foreign exchange impacts, revenues were flat.

  • Following the May 2021 expiration of regulatory exclusivity for Eliquis in Europe, generic manufacturers have sought to challenge our Eliquis patents and related SPCs and have begun marketing generic versions of Eliquis in certain countries prior to the expiry of our patents and related SPCs, which has led to the filing of infringement and invalidity actions involving our Eliquis patents and related SPCs being filed in various countries in Europe. We believe in the innovative science behind Eliquis and the strength of our intellectual property, which we will defend against infringement. Refer to "Item 1. Financial Statements—Note 18. Legal Proceedings and Contingencies—Intellectual Property" for further information.

Revlimid (lenalidomide) — an oral immunomodulatory drug that in combination with dexamethasone is indicated for the treatment of patients with multiple myeloma. Revlimid as a single agent is also indicated as a maintenance therapy in patients with multiple myeloma following autologous hematopoietic stem cell transplant. Revlimid has received approvals for several indications in the hematological malignancies including lymphoma and MDS.

*•*U.S. revenues decreased 4% during the second quarter of 2024 and 5% year-to-date primarily due to generic erosion and lower average net selling prices, partially offset by the impact of patients receiving free drug product from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which BMS donates products, in 2023.

*•*International revenues decreased 24% during second quarter of 2024 and 15% year-to-date primarily due to generic erosion across several European countries and foreign exchange impacts of 4% in both periods. Excluding foreign exchange impacts, revenues decreased by 20% and 11%, respectively.

  • In the U.S., certain third parties were granted volume-limited licenses to sell generic lenalidomide beginning in March 2022 or thereafter. Pursuant to these licenses, several generics have entered or are expected to enter the U.S. market with volume-limited quantities of generic lenalidomide. In the EU and Japan, generic lenalidomide products have entered the market.

Pomalyst/Imnovid (pomalidomide) — a proprietary, distinct, small molecule that is administered orally and modulates the immune system and other biologically important targets. Pomalyst/Imnovid is indicated for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and a proteasome inhibitor and have demonstrated disease progression on or within 60 days of completion of the last therapy.

  • U.S. revenues increased 27% during the second quarter of 2024 and 19% year-to-date due to higher demand and the impact of patients receiving free drug product from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which BMS donates products, in 2023.

  • International revenues decreased 14% during the second quarter of 2024 and 11% year-to-date primarily due to lower demand and foreign exchange impacts of 3% and 2%, respectively. Excluding foreign exchange impacts, revenues decreased by 11% and 9%, respectively. In the EU, the estimated minimum market exclusivity date is August 2024.

Sprycel (dasatinib) — an oral inhibitor of multiple tyrosine kinase indicated for the first-line treatment of patients with Philadelphia chromosome-positive CML in chronic phase and the treatment of adults with chronic, accelerated, or myeloid or lymphoid blast phase CML with resistance or intolerance to prior therapy, including Gleevec* (imatinib mesylate) and the treatment of children and adolescents aged 1 year to 18 years with chronic phase Philadelphia chromosome-positive CML.

  • U.S. revenues increased 6% during the second quarter of 2024 and 2% year-to-date primarily due to higher demand partially offset by lower average net selling prices.

  • International revenues decreased 39% during the second quarter of 2024 and 36% year-to-date primarily due to lower demand, lower average net selling prices and foreign exchange impacts of 5% and 4%, respectively. Excluding foreign exchange impacts, revenues decreased by 34% and 32%, respectively.

  • In the U.S., BMS entered into settlement agreements with certain third parties to sell generic dasatinib products beginning in September 2024, or earlier in certain circumstances. In the EU, generic dasatinib products have entered the market. In Japan, the composition of matter patent for the treatment of non-imatinib-resistant CML has expired.

Abraxane (paclitaxel albumin-bound particles for injectable suspension) — a solvent-free protein-bound chemotherapy product that combines paclitaxel with albumin using our proprietary Nab® technology platform, and is used to treat breast cancer, NSCLC and pancreatic cancer, among others.

  • U.S. revenues decreased 18% during the second quarter of 2024 and 14% year-to-date primarily due to lower demand.

Other Legacy Portfolio Products — includes other mature brands.

Estimated End-User Demand

Pursuant to the SEC Consent Order described under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation— SEC Consent Order" in our 2023 Form 10-K, we monitor inventory levels on hand in the U.S. wholesaler distribution channel and outside of the U.S. in the direct customer distribution channel. We disclose products with levels of inventory in excess of one month on hand or expected demand, subject to certain limited exceptions. There were none as of June 30, 2024, for our U.S. distribution channels, and as of March 31, 2024, for our non-U.S. distribution channels.

In the U.S., we generally determine our months on hand estimates using inventory levels of product on hand and the amount of out-movement provided by our three largest wholesalers, which accounted for approximately 86% of total gross sales of U.S. products during the six months ended June 30, 2024. Factors that may influence our estimates include generic erosion, seasonality of products, wholesaler purchases in light of increases in wholesaler list prices, new product launches, new warehouse openings by wholesalers and new customer stockings by wholesalers. In addition, these estimates are calculated using third-party data, which may be impacted by their recordkeeping processes.

Camzyos is only available through a restricted program called the Camzyos REMS Program. Product distribution is limited to REMS certified pharmacies, and enrolled pharmacies must only dispense to patients who are authorized to receive Camzyos. Revlimid and Pomalyst are distributed in the U.S. primarily through contracted pharmacies under the Lenalidomide REMS (Revlimid) and Pomalyst REMS programs, respectively. These are proprietary risk-management distribution programs tailored specifically to provide for the safe and appropriate distribution and use of Revlimid and Pomalyst. Internationally, Revlimid and Imnovid are distributed under mandatory risk-management distribution programs tailored to meet local authorities' specifications to provide for the products' safe and appropriate distribution and use. These programs may vary by country and, depending upon the country and the design of the risk-management program, the product may be sold through hospitals or retail pharmacies.

Our non-U.S. businesses have significantly more direct customers. Information on available direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information varies widely. We limit our direct customer sales channel inventory reporting to where we can influence demand. When this information does not exist or is otherwise not available, we have developed a variety of methodologies to estimate such data, including using historical sales made to direct customers and third-party market research data related to prescription trends and end-user demand. Given the difficulties inherent in estimating third-party demand information, we evaluate our methodologies to estimate direct customer product level inventory and to calculate months on hand on an ongoing basis and make changes as necessary. Factors that may affect our estimates include generic competition, seasonality of products, price increases, new product launches, new warehouse openings by direct customers, new customer stockings by direct customers and expected direct customer purchases for governmental bidding situations. As such, all of the information required to estimate months on hand in the direct customer distribution channel for non-U.S. business during the six months ended June 30, 2024 is not available prior to the filing of this Quarterly Report on Form 10-Q. We will disclose any product with levels of inventory in excess of one month on hand or expected demand for the current quarter, subject to certain limited exceptions, in our next quarterly report on Form 10-Q.

Expenses

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions20242023% Change20242023% Change
Cost of products sold(a)$3,267$2,87614%$6,199$5,44214%
Marketing, selling and administrative1,9281,934—%4,2953,69616%
Research and development2,8992,25828%5,5944,57922%
Acquired IPRD132158(16)%13,081233*
Amortization of acquired intangible assets2,4162,2577%4,7734,5136%
Other (income)/expense, net273(116)*354(529)*
Total Expenses$10,915$9,36717%$34,296$17,93491%
  • In excess of +/- 100%.

(a) Excludes amortization of acquired intangible assets.

Cost of Products Sold

Cost of products sold increased by $391 million in the second quarter of 2024 and $757 million year-to-date primarily due to an impairment charge related to Inrebic ($280 million), higher profit sharing and royalty expense ($144 million and $295 million) and higher sales volume.

Marketing, Selling and Administrative

Marketing, selling and administrative expense was flat in the second quarter of 2024.

Marketing, selling and administrative expense increased by $599 million year-to-date primarily due to the impact of recent acquisitions ($507 million, including the cash settlement of unvested stock awards and other related expenses of $372 million) and timing of charitable giving ($150 million).

Research and Development

Research and development expense increased by $641 million in the second quarter of 2024 and $1.0 billion year-to-date primarily due to an IPRD impairment charge relating to alnuctamab ($590 million) and the impact of recent acquisitions ($197 million in the second quarter and $648 million year-to-date). Year-to-date 2024 impact from acquisitions includes the cash settlement of unvested stock awards and other related expenses of $348 million.

Acquired IPRD

Acquired IPRD charges resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights were as follows:

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions2024202320242023
Karuna asset acquisition (Note 4)$—$—$12,122$—
SystImmune upfront fee (Note 3)——800—
Evotec designation and opt in license fee20404590
Prothena opt-in license fee80558055
Other32633488
Acquired IPRD$132$158$13,081$233

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets increased by $159 million in the second quarter of 2024 and $260 million year-to-date primarily due to the intangible assets acquired through the RayzeBio acquisition in the first quarter of 2024 and FDA approval of Augtyro in the fourth quarter of 2023.

Other (Income)/Expense, Net

Other (income)/expense, net changed by $389 million in the second quarter of 2024 and $883 million year-to-date as discussed below.

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions2024202320242023
Interest expense$521$282$946$570
Royalty and licensing income(191)(340)(352)(703)
Royalty income - divestitures(265)(218)(536)(406)
Investment income(87)(95)(270)(197)
Litigation and other settlements69(7)71(332)
Provision for restructuring260113480180
Integration expenses7459145126
Equity investment (gain)/losses(107)58(209)213
Acquisition expenses1—50—
Other(2)322920
Other (income)/expense, net$273$(116)$354$(529)

  • Interest expense increased in the second quarter of 2024 and year-to-date compared to 2023 due to additional borrowings. Refer to "Item 1. Financial Statements—Note 10. Financing Arrangements" for further information.

  • Royalty income decreased in the second quarter of 2024 and year-to-date primarily due to lower royalty rates for Keytruda* starting in 2024, partially offset by higher royalties from diabetes business divestitures in 2024. Refer to "Item 1. Financial Statements—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements" for further information.

  • Investment income is primarily driven by changes in average cash and marketable debt securities balances.

  • Litigation and other settlements includes amounts related to pricing, sales and promotional practices disputes and securities litigation matters, partially offset by income from the Eisai collaboration termination in 2024. Refer to "Item 1. Financial Statements—Note 3. Alliances" and "Item 1. Financial Statements —Note 18. Legal Proceedings and Contingencies" for further information. Year-to-date 2023 includes income related to the Nimbus' TYK2 program change of control provision and additional settlement costs related to commercial disputes regarding intellectual property matters. Refer to "Item 1. Financial Statements—Note 5. Other (Income)/Expense, Net" for further information.

  • Provision for restructuring includes exit and other costs primarily related to certain restructuring activities including the plans discussed further in "Item 1. Financial Statements—Note 6. Restructuring". The increase is primarily due to the recent acquisitions.

  • Integration expenses increased in the second quarter of 2024 and year-to-date primarily due to the recent acquisitions.

  • Equity investments generated gains in the second quarter of 2024 compared to losses in 2023 primarily driven by fair value adjustments for investments that have readily determinable fair value. Refer to "Item 1. Financial Statements—Note 9. Financial Instruments and Fair Value Measurements" for more information.

  • Acquisition expenses primarily includes investment banking and professional advisory fees.

  • Other in 2024 includes a $19 million settlement charge in connection with the termination of the Puerto Rico pension plan.

Income Taxes

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions2024202320242023
Earnings before income taxes$1,286$1,859$(10,230)$4,629
Income tax (benefit)/provision(398)(218)(6)285
Effective tax rate(30.9)%(11.7)%0.1%6.2%
Impact of specified items(45.0)%(28.6)%43.3%(10.0)%
Effective tax rate excluding specified items14.1%16.9%(43.2)%16.2%

Provision for income taxes in interim periods is determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The effective tax rate for the second quarter of 2024 was primarily impacted by the release of income tax reserves of $644 million related to the resolution of Celgene's 2017-2019 IRS audit and impacted by specified items including jurisdictional earnings mix resulting from amortization of acquired intangible assets.

Excluding the impact of specified items, the effective tax rate decreased from 16.9% to 14.1% in the second quarter of 2024 primarily due to the release of income tax reserves of $142 million related to the resolution of the aforementioned Celgene audit.

The year-to-date 2024 effective tax rate was primarily impacted by a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna and the $644 million related to the resolution of Celgene's 2017-2019 IRS audits. The Karuna non-tax deductible charge affected the effective tax rate as well as the effective tax rate excluding specified items. In addition, the effective tax rate was impacted by jurisdictional earnings mix resulting from amortization of acquired intangible assets, foreign currency changes on certain net operating loss and other carryforwards in 2024, and other specified items.

The effective tax rate during the second quarter and year-to-date 2023 was primarily impacted by a $656 million deferred income tax benefit following the receipt of a non-U.S. tax ruling regarding the deductibility of a statutory impairment of subsidiary investments. In addition, the effective tax rate during the six months ended June 30, 2023 was impacted by jurisdictional earnings mix resulting from amortization of acquired intangible assets, equity investment losses, litigation and other settlements, as well as releases of income tax reserves of $89 million related to the resolution of Celgene's 2009-2011 IRS audits.

Non-GAAP Financial Measures

Our non-GAAP financial measures, such as non-GAAP earnings and related EPS information, are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the Company believes they neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including (i) amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, (ii) unwind of inventory purchase price adjustments, (iii) acquisition and integration expenses, (iv) restructuring costs, (v) accelerated depreciation and impairment of property, plant and equipment and intangible assets, (vi) costs of acquiring a priority review voucher, (vii) divestiture gains or losses, (viii) stock compensation resulting from acquisition-related equity awards, (ix) pension, legal and other contractual settlement charges, (x) equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments), (xi) income resulting from the change in control of the Nimbus TYK2 Program and (xii) amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Certain other significant tax items are also excluded such as the impact resulting from a non-U.S. tax ruling regarding the deductibility of a statutory impairment of subsidiary investments and release of income tax reserves relating to the Celgene acquisition. We also provide international revenues for our priority products excluding the impact of foreign exchange. We calculate foreign exchange impacts by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in Exhibit 99.1 to our Form 8-K filed on July 26, 2024 and are incorporated herein by reference.

Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management's, analysts' and investors’ overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. This information is not intended to be considered in isolation or as a substitute for the related financial measures prepared in accordance with GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Specified items were as follows:

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions2024202320242023
Inventory purchase price accounting adjustments$13$31$21$84
Intangible asset impairment280—280—
Site exit and other costs3361737
Cost of products sold29667318121
Acquisition related charges(a)——372—
Site exit and other costs6201220
Marketing, selling and administrative62038420
IPRD impairments590—59020
Priority review voucher———95
Acquisition related charges(a)——348—
Site exit and other costs146156
Research and development6046953121
Amortization of acquired intangible assets2,4162,2574,7734,513
Interest expense(b)(12)(13)(25)(27)
Litigation and other settlements61—61(335)
Provision for restructuring260113480180
Integration expenses7459145126
Equity investment (gain)/losses(107)58(209)208
Acquisition expenses1—50—
Other——10(5)
Other (income)/expense, net277217512147
Increase to pretax income3,5992,5676,9404,922
Income taxes on items above(585)(311)(925)(604)
Income tax reserve releases(502)—(502)—
Income taxes attributed to non-U.S. tax ruling—(656)—(656)
Income taxes(1,087)(967)(1,427)(1,260)
Increase to net earnings$2,512$1,600$5,513$3,662

(a) Includes cash settlement of unvested stock awards, and other related costs incurred in connection with the recent acquisitions.

(b) Includes amortization of purchase price adjustments to Celgene debt.

The reconciliations from GAAP to Non-GAAP were as follows:

Three Months Ended June 30,Six Months Ended June 30,
Dollars in millions, except per share data2024202320242023
Net (loss)/earnings attributable to BMS
GAAP$1,680$2,073$(10,231)$4,335
Specified items2,5121,6005,5133,662
Non-GAAP$4,192$3,673$(4,718)$7,997
Weighted-average common shares outstanding – diluted2,0292,1022,0252,107
Diluted (loss)/earnings per share attributable to BMS
GAAP$0.83$0.99$(5.05)$2.06
Specified items1.240.762.721.74
Non-GAAP$2.07$1.75$(2.33)$3.80

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Our net debt position was as follows:

Dollars in MillionsJune 30, 2024December 31, 2023
Cash and cash equivalents$6,293$11,464
Marketable debt securities – current360816
Marketable debt securities – non-current357364
Total cash, cash equivalents and marketable debt securities7,01012,644
Short-term debt obligations(3,531)(3,119)
Long-term debt(48,858)(36,653)
Net debt position$(45,379)$(27,128)

We believe that our existing cash, cash equivalents and marketable debt securities, together with our ability to generate cash from operations and our access to short-term and long-term borrowings, are sufficient to satisfy our existing and anticipated cash needs, including dividends, capital expenditures, milestone payments, working capital, income taxes, restructuring initiatives, business development, business combinations, asset acquisitions, repurchase of common stock, debt maturities, as well as any debt repurchases through redemptions or tender offers. During the six months ended June 30, 2024, our net debt position increased by $18.3 billion primarily driven by payments for recent acquisitions, collaborations and milestones of $21.4 billion and $2.4 billion of dividend payments, partially offset by cash provided by operations of $5.2 billion.

During the six months ended June 30, 2024, we issued the 2024 Senior Unsecured Notes in an aggregate principal amount of $13.0 billion with proceeds, net of discount and loan issuance costs, of $12.9 billion. The proceeds from the 2024 Senior Unsecured Notes were used to partially fund the acquisitions of RayzeBio and Karuna, and the remaining net proceeds were used for general corporate purposes. In connection with the issuance of the 2024 Senior Unsecured Notes, we terminated the $10.0 billion 364-day senior unsecured delayed draw term loan facility entered in February 2024 to provide bridge financing for the RayzeBio and Karuna acquisitions.

During the six months ended June 30, 2024, $395 million 3.625% Notes matured and were repaid.

Under our commercial paper program, we may issue a maximum of $7.0 billion of unsecured notes that have maturities of not more than 365 days from the date of issuance. During the first quarter of 2024, we issued $3.0 billion of commercial paper, of which $2.7 billion was repaid during the second quarter of 2024.

There were no borrowings outstanding under our $5.0 billion revolving credit facility as of June 30, 2024 and December 31, 2023. This credit facility expires in January 2029 and is extendable annually by one year with the consent of the lenders. Additionally, in February 2024, we entered into a $2.0 billion 364-day revolving credit facility, under which no borrowings were outstanding as of June 30, 2024. The facilities provide for customary terms and conditions with no financial covenants and may be used to provide backup liquidity for our commercial paper borrowings.

Dividend payments were $2.4 billion during the six months ended June 30, 2024 and 2023. The decision to authorize dividends is made on a quarterly basis by our Board of Directors.

Annual capital expenditures are expected to be approximately $1.4 billion for the full year 2024. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities, research and development and other facility-related activities.

During the six months ended June 30, 2024 and 2023, income tax payments were $2.1 billion and $3.1 billion, including $799 million and $567 million, respectively, for the transition tax following the TCJA enactment.

Cash Flows

The following is a discussion of cash flow activities:

Six Months Ended June 30,
Dollars in millions20242023
Cash flow provided by/(used in):
Operating activities$5,160$4,857
Investing activities(20,937)(539)
Financing activities$10,621$(5,223)

Operating Activities

The $303 million increase in cash provided by operating activities compared to 2023, was primarily due to lower income tax payments of $1 billion, higher customer collections, net of rebates and discounts and alliance payments, ($600 million), partially offset by acquisition-related expenses, including cash settlement of unvested stock awards ($1.0 billion), as well as timing of payments in the ordinary course of business.

Investing Activities

The $20.4 billion increase in cash used in investing activities compared to 2023 was due to higher acquisition-related expenses of $21.2 billion, which included $1.1 billion of payment for Karuna vested equity awards in the second quarter of 2024, as well as collaboration and milestone payments, partially offset by changes in the amount of marketable debt securities held of $692 million.

Financing Activities

The $15.8 billion increase in cash provided by financing activities compared to 2023 was primarily due to net debt borrowings of $13.2 billion in 2024 primarily to fund recent acquisitions compared to net debt repayments of $1.6 billion and $1.2 billion repurchases of common stock in 2023.

Product and Pipeline Developments

Our R&D programs are managed on a portfolio basis from early discovery through late-stage development and include a balance of early-stage and late-stage programs to support future growth. Our late-stage R&D programs in Phase III development include both investigational compounds for initial indications and additional indications or formulations for marketed products. The following are the developments in our marketed products and our late-stage pipeline since the start of the second quarter of 2024 as of July 26, 2024:

ProductIndicationDateDevelopments
cendakimabEosinophilic EsophagitisJuly 2024Announced that the results from the Phase 3 trial evaluating the efficacy and safety of cendakimab in patients with eosinophilic esophagitis met both co-primary endpoints, demonstrating statistically significant reductions versus placebo in symptoms (dysphagia days) and esophageal eosinophil counts after 24 weeks of treatment. The overall safety profile of cendakimab through 48 weeks of treatment in the Phase 3 trial was consistent with previously reported eosinophilic esophagitis Phase 2 trial results, and no new safety signals were identified.
CamzyosoHCMJuly 2024Announced that Japan's Pharmaceuticals and Medical Devices Agency accepted the Japanese New Drug Application for Camzyos for the treatment of obstructive hypertrophic cardiomyopathy, based on results from the global Phase 3 EXPLORER-HCM and Phase 3 VALOR-HCM trials, as well as the Japan Phase 3 HORIZON-HCM study.
KrazatiColorectal CancerJune 2024Announced FDA accelerated approval for Krazati in combination with cetuximab as a targeted treatment option for adult patients with KRASG12C-mutated locally advanced or metastatic colorectal cancer, as determined by an FDA-approved test, who have received prior treatment with fluoropyrimidine-oxaliplatin- and irinotecan-based chemotherapy. This accelerated approval is based on results from the Phase 1/2 KRYSTAL-1 study.
NSCLCJune 2024Announced that the results from the Phase 3 KRYSTAL-12 study evaluating Krazati compared to standard of care chemotherapy in patients with locally advanced or metastatic KRASG12C -mutated NSCLC who had previously received platinum-based chemotherapy, concurrently or sequentially with anti-PD-(L)1 therapy, demonstrated a statistically significant and clinically meaningful improvement in progression-free survival (PFS), the study’s primary endpoint. The KRYSTAL-12 study remains ongoing to assess the additional key secondary endpoint of overall survival.
Colorectal CancerApril 2024Announced that data from the cohorts evaluating Krazati in combination with cetuximab of the Phase 1/2 KRYSTAL-1 study for the treatment of patients with previously treated KRASG12C-mutated locally advanced or metastatic colorectal cancer demonstrated clinically meaningful activity. With a median follow up of 11.9 months in 94 patients, Krazati plus cetuximab demonstrated an objective response rate of 34%, median progression-free survival of 6.9 months, and median overall survival of 15.9 months in pre-treated patients.
AugtyroSolid TumorJune 2024Announced FDA accelerated approval of Augtyro for the treatment of adult and pediatric patients 12 years of age and older with solid tumors that have a neurotrophic tyrosine receptor kinase gene fusion, are locally advanced or metastatic or where surgical resection is likely to result in severe morbidity, and have progressed following treatment or have no satisfactory alternative therapy. This approval is based on results from the Phase 1/2 TRIDENT-1 study.
OpdivoUrothelial CarcinomaMay 2024Announced EC approval of Opdivo in combination with cisplatin and gemcitabine for the first-line treatment of adult patients with unresectable or metastatic urothelial carcinoma. The approval is based on the results from the CheckMate -901 trial.\
NSCLCJune 2024Announced that the four-year survival data from the Phase 3 CheckMate -816 trial demonstrated that at a median follow up of 57.6 months, neoadjuvant Opdivo with chemotherapy continued to improve event-free survival versus chemotherapy alone.
June 2024Announced that an exploratory analysis from the Phase 3 CheckMate -77T study of perioperative Opdivo showed improved event-free survival and pathologic complete response in stage III resectable NSCLC patients regardless of nodal status.
ProductIndicationDateDevelopments
Opdivo + YervoyColorectal CancerMay 2024Announced EMA validation of the Type II variation application for Opdivo plus Yervoy for the first-line treatment of adult patients with microsatellite instability–high or mismatch repair deficient metastatic colorectal cancer. This application is based on the Phase 3 CheckMate -8HW trial.
HCCJuly 2024Announced EMA validation of the Type II variation application for Opdivo plus Yervoy as a potential first-line treatment option for adult patients with unresectable or advanced HCC who have not received prior systemic therapy. The application was based on results from the Phase 3 CheckMate -9DW trial.
June 2024Announced that the results from the Phase 3 CheckMate -9DW trial showed the dual immunotherapy combination of Opdivo plus Yervoy meaningfully improved overall survival, the trial’s primary endpoint, compared to investigator’s choice of lenvatinib or sorafenib as a first-line treatment for patients with unresectable hepatocellular carcinoma. The results also demonstrated a statistically significant and clinically meaningful improvement in the key secondary endpoint of objective response rate.
NSCLCJune 2024Announced that the five-year follow-up results from the Phase 3 CheckMate -9LA trial showed durable, long-term survival benefits with Opdivo plus Yervoy combined with two cycles of chemotherapy compared to chemotherapy alone as a first-line treatment in patients with metastatic NSCLC.
May 2024Announced that the Phase 3 CheckMate -73L trial did not meet its primary endpoint of progression-free survival in unresectable, locally advanced stage III NSCLC.
BreyanziLarge B-Cell LymphomaJune 2024Announced that three-year follow-up results from the Phase 3 TRANSFORM trial demonstrated ongoing event-free survival and durable responses with Breyanzi compared to the standard of care.
Mantle Cell LymphomaJune 2024Announced results from a subgroup analysis from mantle cell lymphoma cohort of the Phase 1 TRANSCEND NHL 001 trial show Breyanzi demonstrated consistent clinical benefit regardless of number of prior lines of therapy.
May 2024Announced FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory mantle cell lymphoma who have received at least two prior lines of systemic therapy, including a Bruton tyrosine kinase inhibitor. This approval is based on results from the MCL cohort of the Phase 1 TRANSCEND NHL 001 study.
Follicular LymphomaJune 2024Announced data from a bridging therapy subgroup analysis of the Phase 2 TRANSCEND FL trial evaluating Breyanzi in second-line plus relapsed or refractory follicular lymphoma show consistent efficacy with high response rates and a consistent safety profile regardless of receiving prior bridging therapy.
May 2024Announced FDA accelerated approval of Breyanzi for the treatment of adult patients with relapsed or refractory FL who have received at least two prior lines of systemic therapy. This accelerated approval is based on results from the Phase 2 TRANSCEND FL study.
ProductIndicationDateDevelopments
Subcutaneous nivolumabMultiple IndicationsJune 2024Announced EMA validation of the extension application to introduce a new route of administration (subcutaneous use) for Opdivo (nivolumab) that includes a new pharmaceutical form (solution for injection) and a new strength (600 mg/vial) across multiple previously approved adult solid tumor indications as monotherapy, monotherapy maintenance following completion of nivolumab plus ipilimumab combination therapy, or in combination with chemotherapy or cabozantinib, based on the results from the Phase 3 CheckMate -67T study.
May 2024Announced FDA acceptance of the BLA for the subcutaneous formulation of Opdivo co-formulated with Halozyme’s proprietary recombinant human hyaluronidase (rHuPH20) across all previously approved adult, solid tumor Opdivo indications as monotherapy, monotherapy maintenance following completion of Opdivo plus Yervoy (ipilimumab) combination therapy, or in combination with chemotherapy or cabozantinib, based on results from the Phase 3 CheckMate -67T study. The FDA assigned a PDUFA goal date of December 29, 2024.
SotyktuPlaque PsoriasisMay 2024Announced four-year results from the POETYK PSO long-term extension trial of Sotyktu treatment in adult patients with moderate-to-severe plaque psoriasis showed that, after four years of continuous Sotyktu treatment, clinical response was maintained in more than seven out of 10 patients for Psoriasis Area and Severity Index (PASI) 75. In addition, the safety profile of Sotyktu at Year 4 remained consistent with the established safety profile, with no new safety signals identified.
AbecmaMultiple MyelomaApril 2024Announced the FDA approval of Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma after two or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody. The approval is based on results from the Phase III KarMMa-3 trial. Abecma is being jointly developed and commercialized in the U.S. by Bristol Myers Squibb and 2seventy bio, Inc.
KarXTSchizophreniaApril 2024Announced pooled interim long-term safety, tolerability, and metabolic outcomes data from the Phase III EMERGENT-4 and EMERGENT-5 trials evaluating the safety, tolerability and efficacy of KarXT in adults with schizophrenia. KarXT demonstrated a favorable weight and long-term metabolic profile where most patients experience stability or improvements on key metabolic parameters over 52 weeks of treatment. KarXT was generally well-tolerated with a side effect profile consistent with prior trials. In addition, announced interim long-term efficacy data from the Phase III EMERGENT-4 open-label extension trial demonstrated that KarXT was associated with significant improvement in symptoms of schizophrenia across all efficacy measures at 52 weeks.
ReblozylMyelodysplastic SyndromesApril 2024Announced the EC expanded approval of Reblozyl to include the first-line treatment of transfusion-dependent anemia due to very low, low and intermediate-risk myelodysplastic syndromes. The approval covers all European Union member states and is based on the pivotal Phase III COMMANDS trial.

Critical Accounting Policies

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses. Our critical accounting policies are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates. For a discussion of our critical accounting policies, refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Form 10-K. There have been no material changes to our critical accounting policies during the six months ended June 30, 2024. For information regarding the impact of recently adopted accounting standards, refer to "Item 1. Financial Statements—Note 1. Basis of Presentation and Recently Issued Accounting Standards."

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (including documents incorporated by reference) and other written and oral statements we make from time to time contain certain "forward-looking" statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. You can identify these forward-looking statements by the fact they use words such as "should," "could," "expect," "anticipate," "estimate," "target," "may," "project," "guidance," "intend," "plan," "believe," "will" and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on our current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These statements are likely to relate to, among other things, our goals, plans and objectives regarding our financial position, results of operations, cash flows, market position, product development, product approvals, sales efforts, expenses, performance or results of current and anticipated products, our business development strategy and in relation to our ability to realize the projected benefits of our acquisitions, alliances and other business development activities, the impact of any pandemic or epidemic on our operations and the development and commercialization of our products, potential laws and regulations to lower drug prices, market actions taken by private and government payers to manage drug utilization and contain costs, the expiration of patents or data protection on certain products, including assumptions about our ability to retain marketing exclusivity of certain products and the outcome of contingencies such as legal proceedings and financial results. No forward-looking statement can be guaranteed. This Quarterly Report on Form 10-Q, our 2023 Form 10-K, particularly under the section "Item 1A. Risk Factors," and our other filings with the SEC, include additional information on the factors that we believe could cause actual results to differ materially from any forward-looking statement.

Although we believe that we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. Additional risks that we may currently deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this Quarterly Report on Form 10-Q not to occur. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise after the date of this Quarterly Report on Form 10-Q.

Previous: Item 1. FINANCIAL STATEMENTS · Next: Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK