Bristol-Myers Squibb Company

Welcome to the Bristol-Myers Squibb Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Tim Power, Vice President and Head of Investor Relations. Please go ahead.

Thank you and good morning, everyone. Thanks for joining us this morning for our fourth quarter 2023 earnings call. Joining me this morning with prepared remarks are Chris Berner, our Chief Executive Officer, and David Elkins, our Chief Financial Officer. Also participating in today's call are Adam Lankowski, our Chief Commercialization Officer, and Sumit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can use to follow along with for Chris and David's remarks. Before we get started, I'll read our forward-looking statement. During this call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by these 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. 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. And with that, I'll hand it over to Chris.

Thanks, Tim, and good morning to all of you. I'm very pleased to be speaking to you on our earnings call for the first time as CEO, and I'm excited about the opportunity for our company to continue to deliver transformational medicines for patients. Please turn to slide four. Q4 2023 was a good quarter, including strong sales momentum in our inline and new product portfolio with 9% growth and nearly $10 billion in revenue. with growth across multiple key brands, including Eloquus, Updivo, Reblazil, Opdulag, Brianzi, Chemzios, and SoTik2. We also continue to generate significant cash flows from operations of $4.3 billion in the quarter. And as you'll hear from David in a few minutes, we expect to grow our business this year. During the fourth quarter, we also achieved important pipeline milestones and several key business development transactions to strengthen our growth profile. This is an important time for BMS. I know that many of you are focused on our strategy to navigate the decade and on the importance of disciplined execution at the company. We are writing the next chapter for BMS, and with that comes an opportunity for change. So let me take a few minutes to tell you about our strategy to navigate our LOEs and be very clear about my focus on execution. Let's go to slide five and how we see the company today. When we look at our business, it's comprised of two portfolios. First, we see a legacy portfolio of well-established products facing headwinds such as IRA. Though this portfolio is declining, it is expected to continue to generate strong cash flows to enable investment in our future growth drivers. Second, we see an expanding portfolio of growth products, many of which are relatively newer to the market and have significant expansion potential. When you look at these portfolios combined with our exciting pipeline, you can see how it all comes together as depicted on slide six. As we think about this decade, we see three distinct periods, a near-term growth period, a transition period, and potential for sustainable top-tier growth, which we plan to drive in the back end of the decade. Between now and the middle of the decade, our focus will be on maximizing the opportunity we have with our growth portfolio. This, along with pipeline execution, can best position the company into the transition period. Then starting around 2026, our exposure is most acute, and our focus will be on shortening the transition period as much as possible by accelerating our R&D programs, executing on product approvals and launches, while maintaining P&L discipline. Finally, in the latter part of the decade, around 2028 and beyond, we plan to deliver sustainable top-tier growth, and we have the portfolio, pipeline, and financial flexibility to support this opportunity. Many of you recognize the first two periods. However, the late decade return to growth phase is less appreciated externally, including a number of important products that are not fully appreciated in consensus models today. What supports our confidence is our expanding pipeline, recent deals, and newly launched products. Our strategy is to minimize the transition period coming in a few years while maximizing our growth in the back part of the decade. Turning to slide seven. My confidence in our strategy is supported by the fact that, compared with other companies that successfully navigated similar periods, we have some clear strengths. an expanding growth portfolio across multiple therapeutic areas, an exciting pipeline, differentiated platforms, and continued financial strength to further invest for growth with business development. And the momentum from our most recent quarter to capitalize on these strengths is clear from slide eight. In October, we told you we would strengthen commercial performance, and during Q4, we've been making progress. We have increased investment behind key growth brands such as Camxios and Sotic2. We are re-accelerating growth for Reblazil by capitalizing on the launch of the commands indication in first-line MDS. Our efforts to further establish Opdulag as the standard of care in first-line melanoma are driving further growth. And we have made progress expanding capacity for cell therapies, particularly setting up Brianzi for significant expansion this year. In R&D, we delivered important milestones, including recharging our early stage pipeline with 10 INDs, as we told you we would do at our R&D day, delivering the approval of Octiro in first line Ross positive lung cancer, And advancing our key platforms, including initiating our CD 19 next T study and multiple sclerosis for our cell therapy program and showing early but important phase one data for the LDD prostate asset from our targeted protein degradation platform. Importantly. We've been active in business development. Specifically, we further diversified our oncology portfolio with targeted oncology assets such as Crizati and PRMT5 from the recently completed Mirati acquisition. The planned addition of a differentiated bispecific ADC from system immune with exciting phase one data across tumors, including lung and breast cancers. and the planned acquisition of Ray's Bio, bringing important radiopharmaceutical assets, pipeline, and manufacturing capabilities. And we announced the planned acquisition of Karuna Therapeutics, bringing CAR-XT, which we believe will be a transformational medicine for patients with schizophrenia, Alzheimer's, psychosis, and potentially other indications with multibillion-dollar sales potential. We are looking forward to launching this medicine after closing the transaction later this year. These deals add important growth substrate to our company and diversify our portfolio for the long term. Let's turn to slide nine. Execution for me is a top priority, starting with commercial. The focus is on continuing to accelerate performance for key growth drivers. This means ensuring the right resourcing and investment levels across our most important brands. And it means having the best people and driving accountability for delivering results. In R&D, building on the momentum I described coming out of last quarter, As we highlighted at our R&D day, we have a strong pipeline with the potential to deliver over 16 NMEs through the late 2020s. And here we need to accelerate and deliver top-tier productivity. We are also taking a hard look at our pipeline to prioritize investments for projects with higher return opportunities and discontinuing lower priority programs. And our OPEX base. As we told you, we are going to absorb the OPEX from Karuna. This means we need to make room for these assets by focusing our OPEX base to increase efficiency and productivity. We have begun executing across all three fronts and look forward to updating you on our progress in future quarters. We plan to grow our business this year, as shown on slide 10. David will provide much more detail on our guidance in a few minutes. But what's important from my perspective is that getting our long-term plan to work requires us to deliver well in the short term. A few weeks ago, I reaffirmed our long-term targets as of that date. At that time, I also said we were going back to our historical practice of providing mainly annual guidance with total company rather than product-level revenue targets. Therefore, we will not be updating those long-term targets moving forward. With that in mind, you can see that our growth portfolio is strengthening and our guidance reflects expected top-line growth this year. Before I hand the call over to David, I would like to thank my BMS colleagues for their efforts at serving patients during 2023 and for their enthusiasm for embarking on our next chapter as a company. David?