BMY 10-K diff: FY 2023-12-31 → FY 2025-12-31
Paragraph-level diff of Risk Factors (Item 1A) and Management's Discussion & Analysis (Item 7).
Item 1A · Risk Factors
+64 paragraphs −57 paragraphs ~57 changed
FY 2023-12-31 (earlier)
Item 1A. RISK FACTORS.
Any of the risks and uncertainties described below could significantly and negatively affect our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings now and in the future, which could cause the trading price of our common stock to decline significantly. Additional risks and uncertainties that are not presently known to us, or risks that we currently consider immaterial, could also impair our business operations, financial condition, operating results or cash flows. The following discussion of risk factors contains “forward-looking” statements, as discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Special Note Regarding Forward-Looking Statements.”
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.Our products continue to be subject to increasing pressures across the portfolio from pharmaceutical market access and pricing controls, required rebates and other discounts, 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. We expect that these market access constraints, pricing controls and discounting and other restrictions will become more acute as public and private payers continue to take aggressive steps to control their expenditures. Our future revenues and profit margins could be negatively affected, including as a result of (i) changes in laws and regulations relating to the pricing and reimbursement of pharmaceutical products (including potential penalties for increasing prices over the rate of inflation, new discounts to fund a redesign of the Medicare Part D benefit, and government negotiations/price controls that may change the determination of the "best price" and establish a maximum allowed price/reimbursement rate), as well as other changes relating to federal healthcare programs, such as modifying the federal Anti-Kickback statute discount safe harbor and the IRA, which includes a number of provisions intended to lower the costs of some drugs covered under Medicare Part D and Medicare Part B and to limit Medicare beneficiaries’ out-of-pocket spending under the Medicare Part D benefit, (ii) cost-cutting measures by federal healthcare programs, such as Medicare and Medicaid, MCOs and other institutional and governmental purchasers, (iii) the grant of additional authority to governmental agencies to manage drug utilization and negotiate drug prices (including the implementation of the 2020 regulation issued by the U.S. federal government authorizing states and private parties to develop and implement programs to import certain prescription drugs from Canada and sell them in the U.S., and the American Rescue Plan Act of 2021, which eliminated the Medicaid Prescription Drug Rebate cap starting January 1, 2024), (iv) expanded utilization under the 340B Drug Pricing Program ("340B program"), (v) competition related to placements on applicable commercial and Medicare Part D formularies; (vi) changes to U.S. federal pharmaceutical coverage and reimbursement policies and practices, (vii) the increased scrutiny of drug manufacturers (including any additional review of BMS or Celgene by the House Oversight and Reform Committee), (viii) reimbursement delays, (ix) government price erosion mechanisms across Europe and in other countries resulting in deflation for pharmaceutical product pricing, (x) the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid and private sector beneficiaries, (xi) collection delays or failures to pay in government-funded public hospitals outside the U.S., (xii) developments in technology and/or industry practices that could impact the reimbursement policies and practices of third-party payers, and (xiii) inhibited market access due to real or perceived differences in value propositions for our products compared to competing products.
In particular, the IRA will have the effect of reducing prices and reimbursements for certain of our products, which could significantly impact our business. Under the IRA, the U.S Department of Health and Human Services can effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D. Generally, these government prices apply nine years (for small molecule drugs) or 13 years (for biological products) following FDA approval and will be capped at a statutory ceiling price that is likely to represent a significant discount from average prices to wholesalers and direct purchasers. In August 2023, the U.S. Department of Health and Human Services selected Eliquis as one of the first 10 medicines subject to government-set prices beginning in 2026. The Medicare price setting process began in February 2024 and will conclude by August 1, 2024. On September 1, 2024, CMS will publish prices that will be applicable to the ten drugs in the Medicare program beginning January 1, 2026. It is possible that more of our products will be selected in future years, which could, among other things, accelerate revenue erosion prior to expiry of intellectual property protections. The IRA also requires drug manufacturers to provide rebates for Medicare Part B and Part D medicines under certain circumstances. The Part D benefit redesign will replace the Part D CGDP with a new manufacturer discount program. Beginning in January 2025, under the IRA, the 70 percent CGDP discount will be replaced by a 10 percent manufacturer discount for all Medicare Part D beneficiaries that have met their deductible and incurred out of pocket drug costs below a $2,000 threshold and a 20 percent discount for beneficiaries that have incurred out of pocket drug costs above the $2,000 threshold under the new Part D benefit redesign. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties, which could be significant. The IRA has and will continue to meaningfully impact our business strategies and those of others in the pharmaceutical industry. The full impact of the IRA on our business and the pharmaceutical industry, including the implications to us of our or a competitor's product being selected for price setting, remains uncertain.
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At the state level, multiple states are pursuing government actions and ballot initiatives to address or limit drug pricing and reimbursement for their Medicaid programs. These initiatives include attempts to use the IRA's referenced drug price at the state level. Some of these state-level proposals may also influence federal policy and legislation. Given the uncertainty surrounding the adoption and timing of these potential legislative, policy, or administrative changes, we are unable to predict their impact on our business. However, if enacted, these changes could modify or decrease access, coverage, or reimbursement of our products, impact our rebates, or shift costs to us, which could in turn have a material impact on our business and results of operations.
Additionally, manufacturers who are found to have knowingly and intentionally overcharged 340B program covered entities could be subject to significant monetary penalties. Over the course of the past few years, Celgene had received inquiries from Human Resources and Services Administration regarding the limited distribution networks for Revlimid, Pomalyst, and Thalomid and compliance with the 340B program. As part of our broader integration strategy and alignment of our distribution model (post our acquisition of Celgene Corporation) we had announced that beginning March 1, 2022, we would recognize up to two designated 340B program contract pharmacy locations per 340B program hospital that lacks an entity-owned pharmacy. Although we believe that we have complied with, and continue to comply with, all applicable legal requirements, additional legal or legislative changes with respect to the 340B program may cause us to update our approach. Significant changes to our sales or pricing practices with regard to the distribution of drugs under the 340B program, or any material changes in our U.S. payer channel mix, could have an adverse effect on our revenues and profitability. In addition, if we are required to pay penalties under the applicable regulations, there would be an adverse effect on our revenues and profitability. For additional information on pricing pressures and other constraints, refer to “Item 1. Business—Pricing, Price Constraints and Market Access.”
We may experience difficulties or delays in the development and commercialization of new products. Our ability to replace revenue from products that lose patent protection is directly dependent on our ability to successfully commercialize new products in a timely manner.
As is common in the pharmaceutical industry, BMS expects that sales of its key brand products like Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane will decline after the loss of market exclusivity for such products. Consequently, our future success is highly dependent on our pipeline of new products. There is a high rate of failure inherent in the research and development process for new drugs. As a result, there is a high risk that funds we invest in research programs will not generate financial returns. Compounds or products may appear promising in development but fail to reach market within the expected or optimal timeframe, or at all. We have experienced setbacks and may continue to do so.
In addition, product extensions or additional indications may not be approved. Furthermore, products or indications approved under the U.S. FDA’s Accelerated Approval Program may be contingent upon verification and description of clinical benefit in confirmatory studies and such studies may not be successful.
Developing and commercializing new compounds and products involve inherent risks and uncertainties, including (i) efficacy and safety concerns or findings of superior safety or efficacy of competing products; (ii) delayed or denied regulatory approvals, including as a result of difficulties in enrolling patients and completing clinical trials in a timely manner; (iii) delays or challenges with producing products on a commercial scale or excessive costs to manufacture products; (iv) failure to enter into or implement optimal alliances for the development and/or commercialization of new products; (v) changes in regulatory approval processes and policies which may cause delays or denials of new product approvals; (vi) preclusion from commercialization due to intellectual property issues or disputes with third parties; (vii) failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product; and (viii) changing clinical preferences, changing industry standards, laws and regulations, or competitors’ innovations, each of which may render new products or enhancements to existing products obsolete.
We are also unable to predict if and when any changes to laws or regulatory policies will occur and how they will affect our business and particularly our pipeline of new products.
Regulatory approval delays are especially common when a product is expected to have a REMS program, as required by the U.S. FDA to address significant risk/benefit issues, and we expect that certain of our future key products will be distributed in the U.S. primarily through a REMS program. The inability to bring a product to market or a significant delay in the expected regulatory approval and related launch date of a new product could negatively impact our revenues and earnings. In addition, if certain acquired pipeline programs are canceled or we believe their commercial prospects have been reduced, we may recognize material non-cash impairment charges for those programs. Finally, losing key molecules and intermediaries or our compound library through a natural or man-made disaster or act of sabotage could negatively impact the product development cycle.
We can provide no assurance when or whether any of our products under development will be approved or launched or whether any products, once launched, will be commercially successful. The public announcement of data from our clinical studies, or those of our competitors, or news of any developments related to our, or our competitors’, products or late-stage compounds may cause significant volatility in our stock price and depending on the data, may result in an adverse impact on our business, financial condition or results of operations. If the development of any of our key late-stage product candidates is delayed or discontinued or a clinical study does24not meet one or more of its primary endpoints, our stock price could decline significantly and there may be an adverse impact on our business, financial condition or results of operations.
We must maintain a continuous flow of successful new products and successful new indications for existing products sufficient both to cover our substantial research and development costs and to replace sales that are lost as profitable products lose market exclusivity or are displaced by competing products or therapies. Failure to do so in the short-term or long-term can have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects. There can be no assurance that our key product candidates would prove to be safe and effective or as safe and effective as other competing products, or that, even if approved, any such products will become commercially successful for all approved indications.We could lose market exclusivity of a product earlier than expected.
In the pharmaceutical and biotechnology industries, the majority of an innovative product’s commercial value is realized during its market exclusivity period. In the U.S. and in some other countries, when market exclusivity expires and generic versions are approved and marketed or when biosimilars are introduced (even if only for a competing product), there are usually very substantial and rapid declines in a product’s revenues.Market exclusivity for our products is based upon patent rights and certain regulatory forms of exclusivity. The scope of our patent rights, if any, varies from country to country and may also be dependent on the availability of meaningful legal remedies in a country. The failure to obtain or maintain patent and other intellectual property rights, or limitations on the use or loss of such rights, could result in a rapid loss of sales for any affected products which could be material to us. In some countries, including certain EU member states, basic patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents and/or we (or our licensors) did not file in those countries. In addition, the patent environment can be unpredictable and the validity and enforceability of patents cannot be predicted with certainty. For example, for Eliquis, generics have challenged the composition of matter patents and related SPCs in various jurisdictions and trials have taken place, or are scheduled to take place, in certain European countries. While these legal proceedings are pending, generic manufacturers have begun marketing generic versions of Eliquis in certain EU countries and may seek to market generic versions of Eliquis in other EU countries prior to the expiration date of applicable patents and related SPCs. Furthermore, manufacturers of innovative drugs as well as generic drug manufacturers may be able to design their products around our owned or licensed patents and compete with us using the resulting alternative technology. Absent relevant patent protection for a product, once the data exclusivity period expires, generic or alternative versions can be approved and marketed.
Generic and biosimilar product manufacturers as well as other groups seeking financial gain are also increasingly seeking to challenge patents before they expire, and we could face earlier-than-expected competition for any products at any time. Patents covering our key products have been, and are likely to continue to be, subject to validity, enforceability and infringement challenges in patent litigations and post-grant review patent office proceedings. Although we are confident in the strength of our intellectual property rights, it may be possible for generic drug companies to successfully challenge our rights and launch their generic versions of our drugs prior to the expiration of our intellectual property rights. For example, following certain adverse judicial decisions in the UK and the Netherlands, generic manufacturers have begun marketing generic versions of Eliquis in the UK and Netherlands, and may seek to market generic versions of Eliquis in additional countries in Europe, prior to the expiration of our patents, which may lead to additional infringement and invalidity actions involving Eliquis patents being filed in various countries in Europe. In addition, in order to avoid the uncertainty and expense of litigation, among other reasons, we may decide to enter into settlements with generic manufacturers that permit generic market entry prior to the expiration of our intellectual property rights. For example, as a result of patent settlements, generic entry for Revlimid in the United Kingdom began on January 18, 2022, and in various other European countries on February 18, 2022. Similarly, in the U.S., following patent settlements, certain companies were granted volume-limited licenses to sell generic lenalidomide in the U.S. commencing in March 2022 or thereafter.
In some cases, manufacturers may seek regulatory approval by submitting their own clinical study data to obtain marketing approval or choose to launch a generic product “at risk” before the expiration of the applicable patent(s) and/or before the final resolution of related patent litigation. In addition, some countries are allowing manufacturers to manufacture and sell generic products, which negatively impacts the protections afforded the Company. Lower-priced generics or biosimilars for BMS biologic products or competing biologics could negatively impact our volumes and prices.
In addition, both the U.S. Congress and the U.S. FDA have taken steps to promote the development and approval of generic drugs and biosimilar biologics, including by providing generic and biosimilar developers a private right of action to obtain sufficient quantities of drug samples from the reference product’s manufacturer in order to conduct testing necessary to obtain approval for generic or biosimilar products.
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. A comment period on the proposal ran through February 6, 2024,
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and we are not able to 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.
There is no assurance that a particular product will enjoy market exclusivity for the full time period that appears in the estimates disclosed in this 2023 Form 10-K or that we assume when we provide our financial guidance.
We face intense competition from other manufacturers and expect to see increasing market penetration of lower-priced generic products.
The future growth of BMS is dependent on the market access, uptake and expansion for marketed brands, new product introductions, new indications, product extensions and co-promotional activities with alliance partners. Competition is keen and as we lose exclusivity for some of our marketed brands lower-priced generic products will increasingly penetrate our markets. Generic challenges to our products can also arise at any time, and our patents may not prevent the emergence of generic competition for our products. In some countries, patent protection is significantly weaker than in the U.S. or in the EU; political and social pressure has also pushed legislation and other measures that promote the use of generic and biosimilar products. For additional information, see “Item 1A. Risk Factors—We could lose market exclusivity of a product earlier than expected.”
In addition, we face competition from new products entering the market, particularly in IO. New products may have (i) lower prices, (ii) superior efficacy (benefit) or safety (risk) profiles (whether actual or perceived), (iii) technological advantages that may make such products more convenient to use, (iv) better insurance coverage or reimbursement levels, (v) more effective marketing programs and/or other differentiating factors that make it harder for our products to compete. We cannot predict with accuracy the timing or impact of the introduction of competitive products that treat diseases and conditions like those treated by our products and product candidates. Business combinations among our competitors and major third-party payers may also increase competition for our products. If we are unable to compete successfully against our competitors’ products in the marketplace, this could have a material negative impact on our revenues and earnings.
We could experience difficulties, delays and disruptions in our supply chain as well as in the manufacturing, distribution and sale of our products.
Our product supply and related patient access has been, and could in the future be, negatively impacted by difficulties, delays and disruptions in the manufacturing, distribution and sale of our products. Some of the difficulties, delays and disruptions include: (i) product seizures or recalls or forced closings of manufacturing plants; (ii) our failure, or the failure of any of our vendors or suppliers, to comply with cGMP and other applicable regulations or quality assurance guidelines that could lead to manufacturing shutdowns, product shortages or delays in product manufacturing; (iii) manufacturing, quality assurance/quality control, supply problems or governmental approval delays; (iv) the failure of a supplier, including sole source or single source suppliers, to provide us with the necessary raw materials, supplies or finished goods within a reasonable timeframe and with required quality; (v) the failure of a third-party manufacturer to supply us with bulk active or finished product on time; (vi) construction or regulatory approval delays for new facilities or the expansion of existing facilities, including those intended to support future demand for our biologics products, such as Opdivo; (vii) the failure to meet new and emerging regulations requiring products to be tracked throughout the distribution channels using unique identifiers to verify their authenticity in the supply chain; (viii) other manufacturing or distribution issues, including limits to manufacturing capacity and changes in the types of products produced, such as biologics, physical limitations, labor disputes or shortages, or other business interruptions; and (ix) disruptions in supply chain continuity, including from market forces (such as the recent stress on global logistics), natural disasters, global disease outbreaks or pandemics (including COVID-19), acts of war or terrorism or other unforeseeable or unavoidable events that materially impact one or more of our facilities or a critical supplier.
In addition, manufacturing processes for novel cell-based therapies, such as CAR-T cell therapies, are still evolving, and our processes may be more complicated or more expensive than the approaches taken by our current and future competitors. Our ability to source raw materials and supplies used to manufacture our CAR-T cell therapies and to develop consistent and reliable manufacturing processes and distribution networks with an attractive cost of goods could impact future anticipated revenue and gross profit for our CAR-T cell therapies. Furthermore, we may face challenges with sourcing raw materials and supplies for clinical and, if approved, commercial manufacturing. Logistical and shipment delays and other factors not in our control could prevent or delay the delivery of our product candidates and marketed products to patients. Additionally, we are required to maintain a complex chain of identity and custody with respect to patient material as such material enters into and moves through the manufacturing process. As a result, even slight deviations at any point in the production process for our CAR-T cell therapies or in material used in our CAR-T cell therapies could result in loss of product or regulatory remedial action, which could adversely affect our future anticipated revenues and/or profitability related to our CAR-T cell therapies.26Regulatory, Intellectual Property, Litigation, Tax and Legal Compliance Risks
Litigation claiming infringement of intellectual property may adversely affect our future revenues and operating earnings.
We and certain of our subsidiaries are, and in the future may be, involved in various legal proceedings, including patent litigation, such as claims that our patents are invalid, unenforceable and/or do not cover the product of the generic drug manufacturer or where third parties seek damages and/or injunctive relief to compensate for alleged infringement of their patents by our commercial or other activities. Resolving an intellectual property infringement or other claim can be costly and time consuming and may require us to enter into license agreements, which may not be available on commercially reasonable terms. A successful claim of patent or other intellectual property infringement could subject us to significant damages and/or an injunction preventing the manufacture, sale, or use of the affected product or products. Any of these events could have a material adverse effect on our profitability and financial condition.Adverse outcomes in legal matters could negatively affect our business.
Current or future lawsuits, claims, proceedings and government investigations could preclude or delay the commercialization of our products or could adversely affect our operations, profitability, liquidity or financial condition, after any possible insurance recoveries where available. Such legal matters include (i) intellectual property disputes; (ii) adverse decisions in litigation, including product safety and liability, consumer protection and commercial cases; (iii) anti-bribery regulations, such as the U.S. Foreign Corrupt Practices Act or UK Bribery Act, including compliance with ongoing reporting obligations to the government resulting from any settlements; (iv) recalls or withdrawals of pharmaceutical products or forced closings of manufacturing plants; (v) the alleged failure to fulfill obligations under supply contracts with the government and other customers or under other agreements relating to our business; (vi) product pricing and promotional matters; (vii) lawsuits and claims asserting, or investigations into, violations of securities, antitrust, Federal and state pricing, consumer protection, data privacy and other laws and regulations; (viii) environmental, health, safety and sustainability matters, including regulatory actions in response to climate change; and (ix) tax liabilities resulting from assessments from tax authorities.We are subject to a variety of U.S. and international laws and regulations.We are currently subject to a number of government laws and regulations and, in the future, could become subject to new government laws and regulations. The costs of compliance with such laws and regulations, or the negative results of non-compliance, could adversely affect our business, our operating results and the financial condition of our Company. These laws and regulations control and regulate key aspects of our business including but not limited to (i) market access, pricing controls and discounting; (ii) tax liabilities, returns and payments; (iii) imports and other trade restrictions; (iv) intellectual property protection and enforcement; (v) good practice guidelines and regulations; (vi) accounting standards; (vii) data storage and privacy, particularly in the EU and the U.S.; (viii) requirements for reporting payments and other value transfers to healthcare professionals (such as those provided under the Federal Anti-Kickback Statute); and (ix) compliance with anti-bribery and anti-corruption practices of the U.S. and other countries.
In addition, the U.S. healthcare industry is highly regulated and subject to frequent and substantial changes, including as a result of new judicial or governmental decisions. For example, Congress passed the Food and Drug Omnibus Reform Act in December 2022, which gave the U.S. FDA additional authority to require confirmatory trials to be underway at the time of approval and offered an additional enforcement mechanism if sponsors do not complete such studies with due diligence. We cannot predict how other future federal or state legislative or administrative changes relating to healthcare reform will affect our business. For additional information, refer to “Item 1. Business—Government Regulation,” “Item 1. Business—Pricing, Price Constraints and Market Access” and “—Adverse outcomes in legal matters could negatively affect our business.” Similarly, the legislative and regulatory environment regarding privacy and data protection is continuously evolving and the subject of significant attention by regulators and private parties globally. Regulators are imposing new data privacy and security requirements, including new and greater monetary fines or penalties for privacy violations, and jurisdictions where we operate have passed, or continue to propose, data privacy legislation and or regulations. Failure to comply with these current and future laws could result in significant penalties and reputational harm and could have a material adverse effect on our business and results of operations.Expectations relating to environmental, social and governance considerations and related reporting obligations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.There is an increased focus by foreign, federal, state, and local regulatory and legislative bodies investors and other stakeholders regarding environmental policies relating to climate change, regulating greenhouse gas emissions, carbon taxes, emissions trading schemes, sustainability, human rights and diversity, inclusion and equity matters, and disclosure regarding the foregoing, many of which may be ambiguous, inconsistent, dynamic or conflicting. We expect to experience increased restrictions and compliance costs, legal costs, and expenses related to such new or changing legal or regulatory requirements. Moreover, compliance with any such legal or regulatory requirements would require us to devote substantial time and attention to these matters. In addition, we may still be subject to penalties or potential litigation if such laws and regulations are interpreted or applied in a manner inconsistent with our practices. Moreover, from time to time we establish and publicly announce environmental, social and governance goals and commitments. Implementation of our environmental, social and governance goals and initiatives involves risks and uncertainties,
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requires investments, and depends in part on third-party performance or data that is outside of our control. In addition, some stakeholders may disagree with the Company’s environmental, social and governance goals, targets or objectives. If we do not meet, are perceived not to meet, or if stakeholders disagree with, our environmental, social and governance goals, targets or objectives, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations.Changes to tax regulations could negatively impact our earnings.We are subject to income taxes in the U.S. and various other countries globally. Changes in tax laws and regulations can and do occur. Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are periodically examined by various tax authorities. We have faced, and may continue to face, audit challenges on how we apply a tax law or regulation. The ultimate resolution of any tax matters may result in payments greater or less than amounts accrued, which could have a negative impact on our provision for income taxes. In addition, our future earnings could be negatively impacted by further changes in tax legislation, including changes in tax rates and tax base such as limiting, phasing-out or eliminating deductions or tax credits, increase taxing of certain excess income from intellectual property, revising tax law interpretations in domestic or foreign jurisdictions, changes in rules for earnings repatriations and changes in other tax laws in the U.S. or other countries. Notably, in July and October 2021 OECD/G20 Inclusive Framework agreed on the general rules for redefined jurisdictional taxation rights and a global minimum tax. In December 2022, the EU member states voted unanimously to adopt a Directive implementing the Pillar Two (global minimum tax) rules giving member states until December 31, 2023 to implement the Directive into national legislation. Certain jurisdictions in which we operate, under the OECD/G20 Inclusive Framework, have enacted legislation that adopts a subset of such rules effective January 1, 2024, with the remaining rules becoming effective January 1, 2025. These rules and associated legislative changes may significantly impact our tax provision and results of operations. The implementation of Pillar Two is currently expected to increase our effective tax rate excluding specified items by approximately 1% in 2024.The failure of third parties to meet their contractual, regulatory and other obligations could adversely affect our business.We rely on suppliers, vendors, outsourcing partners, alliance partners and other third parties to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, human resource, finance, IT, data and other business unit and functional services and meet their contractual, regulatory and other obligations. Using these third parties poses a number of risks, such as: (i) they may not perform to our standards or legal requirements, for example, in relation to the outsourcing of significant clinical development activities for innovative medicines to some contract research organizations; (ii) they may not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) they may incur a significant cyberattack or business disruption; (vi) they may be subject to government orders or mandates that require them to give priority to the government and set aside pre-existing commercial orders; (vii) disputes may arise with respect to ownership of rights to technology developed with our partners; and (viii) disagreements could cause delays in, or termination of, the research, development or commercialization of the product or result in litigation or arbitration. Moreover, some third parties are located in markets subject to political and social risks, corruption, infrastructure problems and natural disasters, in addition to country specific privacy and data security risks given current legal and regulatory environments. The failure of any critical third party to satisfactorily meet its obligations, including for future royalty and milestone payments; to adequately deploy business continuity plans in the event of a crisis; and/or to satisfactorily resolve significant disagreements with us or address other factors, could have a material adverse impact on our operations and results. In addition, if these third parties violate, or are alleged to have violated, any laws or regulations, including the local pharmaceutical code, U.S. Foreign Corrupt Practices Act, UK Bribery Act, the EU’s General Data Protection Regulation, and other similar laws and regulations, during the performance of their obligations for us, it is possible that we could suffer financial and reputational harm or other negative outcomes, including possible legal consequences.Product labeling changes for our marketed products could result in a negative impact on revenues and profit margins.Pharmaceutical products receive regulatory approval based on data obtained in controlled clinical trials of limited duration. Additional clinical trials, head-to-head studies, adverse events reports following the use of our products over longer periods of time and studies that identify biomarkers (objective characteristics that can indicate a particular response to a product or therapy) that are conducted after obtaining marketing approval for our products, and regulatory changes to standards regarding safety, efficacy or labeling, may result in product label changes or other measures that could reduce the product's market acceptance and result in declining revenues. Sometimes additional information from new studies identifies a portion of the patient population that may be non-responsive to a medicine or would be at higher risk of adverse reactions and labeling changes based on such studies may limit the patient population. The studies providing such additional information may be sponsored by us, but they could also be sponsored by competitors, insurance companies, government institutions, MCOs, scientists, investigators or other interested parties. While additional safety and efficacy information from such studies assist us and healthcare providers in identifying the best patient population for each product, it can also negatively impact our operating results. New information added to a product’s label can affect its risk-benefit profile, leading to potential voluntary or mandatory recalls, withdrawals or declining revenue, as well as product liability claims. Additionally, certain study results, especially from head-to-head studies, could affect a product’s formulary listing, which could also adversely affect revenues.
28In addition, if safety or efficacy concerns are raised about a third party's product in the same class as one of our products, those concerns could implicate the entire class and this, in turn, could have an adverse impact on the availability or commercial viability of our product(s) as well as other products in the class.The illegal distribution and sale by third parties of counterfeit or unregistered versions of our products or stolen products could have a negative impact on our revenues, earnings, reputation and business.Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet our rigorous manufacturing and testing standards. A patient who receives a counterfeit drug or a product diverted from its authorized market may be at risk for a number of dangerous health consequences. Our reputation and business could suffer harm as a result of counterfeit drugs sold under our brand name or diverted products. The prevalence of counterfeit medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce, which increased during the COVID-19 pandemic, greatly enhancing consumers’ ability to obtain prescriptions and other medical treatments via the internet in lieu of traditional brick and mortar pharmacies. The internet exposes patients to greater risk as it is a preferred vehicle for dangerous counterfeit offers and scams because of the anonymity it affords counterfeiters.
Thefts of inventory at warehouses, plants or while in-transit, which are then not properly stored and are later sold through unauthorized channels, could adversely impact patient safety, our reputation and our business. In addition, diversion of products from their authorized market into other channels may result in reduced revenues and negatively affect our profitability.
Increased use of social media platforms presents risks and challenges.
We are increasing our use of social media to communicate Company news and events. The inappropriate and/or unauthorized use of social media could cause brand damage or information leakage and may give rise to liability, including from the improper collection and/or dissemination of personally identifiable information from employees, patients, healthcare professionals or other stakeholders. In addition, negative or inaccurate posts or comments about us on any social networking website could damage our reputation, brand image and goodwill and may cause significant volatility in our stock price. Further, the disclosure of non-public Company-sensitive information by our workforce or others, whether intentional or unintentional, through external media channels could lead to loss of trade secrets or other intellectual property, as well as the Company’s commercially sensitive information.Information Technology and Cybersecurity RisksWe are dependent on information technology systems and face risk of cybersecurity incidents that could disrupt our business and result in theft of proprietary and confidential information.
We rely extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided by and/or used for third parties or their vendors, to assist in conducting our business. We have faced, and will continue to face, risks of incidents, whether through cyber attacks or cyber intrusions through the Cloud, the Internet, phishing attempts, ransomware and other forms of malware, computer viruses, email attachments, extortion, and other scams. Although we make efforts to maintain the security and integrity of our information technology systems, these systems and the proprietary, confidential and personal information that resides on or is transmitted through them, are subject to the risk of a cybersecurity incident or disruption, and there can be no assurance that our security efforts and measures, and those of our third-party vendors, will prevent breakdowns or incidents to our or our third-party vendors’ systems that could adversely affect our business strategy, results of operations, or financial condition. Cybersecurity risks continue to develop, including as a result of threat actors increasingly targeting employees and supply chains and geopolitical tensions leading to an increase in sabotage, espionage and cyber attacks . As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they may remain undetected for a period of time. A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or leak or theft of proprietary, confidential or personal information could negatively impact operations. There can be no assurance that our continuing efforts will prevent breakdowns or incidents to our or our third-party providers’ systems or databases that could adversely affect our business. Under certain circumstances, such incidents when detected could require disclosure to government authorities and/or regulators and could require notification to impacted individuals and any such incident could result in material financial, legal, business and reputational harm to us.Strategic, Business Development and Employee Attraction and Retention Risks
We depend on several key products for most of our revenues, cash flows and earnings.We derive a majority of our revenue and earnings from several key products. We expect that Revlimid, Eliquis, and Opdivo will represent a significant percentage of our revenue, earnings and cash flows during the next few years. A reduction in revenue from any of these products due to loss of market exclusivity or other factors could adversely impact our earnings and cash flows. For additional information, see “Item 1A. Risk Factors—We could lose market exclusivity of a product earlier than expected.”
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Also, if one of our major products were to become subject to issues such as loss of patent protection, significant changes in demand, formulary access changes, material product liability, unexpected side effects, regulatory proceedings, negative publicity, supply disruption from our manufacturing operations or third-party supplier or a significant advancement of competing products, we may incur an adverse impact on our business, financial condition, results of operations or the trading price of our stock.
In addition, in the U.S., most of our products are distributed through wholesalers, and if one of these wholesalers should encounter financial or other difficulties, we might be unable to timely collect the amounts that the wholesaler owes us, which could negatively impact our results of operations.Third-party royalties represent a significant percentage of our pretax income and operating cash flow.We have entered into several arrangements which entitle us to potential royalties from third parties for out-licensed intellectual property, commercialization rights and sales-based contingent proceeds related to the divestiture of businesses. In many of these arrangements we have minimal, if any, continuing involvement that contribute to the financial success of those activities. Royalties have continued to represent a significant percentage of our pretax income, including royalties related to the divestiture of our diabetes business (including the transfer of certain future royalty rights pertaining to Amylin, Onglyza* and Farxiga* product sales), out-licensed intellectual property and the Merck patent infringement settlement. Pretax income generated from royalties was approximately $2.6 billion in 2023. Our pretax income could be adversely affected if the royalty streams decline in future periods. For example, royalties related to Keytruda* decreased from 6.5% to 2.5% on January 1, 2024 and are expected to terminate on December 31, 2026, and royalties related to Tecentriq* are expected to terminate on December 31, 2026. In addition, our royalties from our divested diabetes business, specifically Amylin, Farxiga and Onglyza, terminate on December 31, 2025.Failure to execute our business strategy or to identify and effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio actions could adversely impact our growth and profitability and our future results. In addition, any businesses or assets that we acquire in the future may underperform, we may not be able to successfully integrate them into our existing business and the occurrence of a number of unexpected factors could prevent or substantially delay the consummation of an anticipated acquisition, divestiture or merger.Our strategy is focused on delivering innovative, transformational medicines to patients in a focused set of disease areas. To support future revenue growth and maintain an adequate pipeline, we have acquired, or in-licensed, a number of assets and we expect to continue to support our pipeline with compounds or products obtained through licensing and acquisitions. Competition among pharmaceutical companies for acquisition and product licensing opportunities is intense, and we may not be able to locate suitable acquisition targets or licensing partners at reasonable prices, or successfully execute such transactions. If we are unable to consistently maintain an adequate pipeline, whether through internal R&D programs or transactions with third parties or if we are unable to support and grow our marketed products, successfully execute the launches of newly approved products, advance our late-stage pipeline, manage change from our operating model evolution or manage our costs effectively, our operating results and financial condition could be negatively impacted.Additionally, future revenues, profits and cash flows of an acquired company’s products, technologies and pipeline candidates may not materialize due to low product uptake, delayed or missed pipeline opportunities, the inability to capture expected synergies resulting from cost savings and avoidance, increased competition, safety concerns, regulatory issues, supply chain problems or other factors beyond our control. Substantial difficulties, costs and delays could result from integrating our acquisitions, including for: (i) R&D, manufacturing, distribution, sales, marketing, promotion and information technology activities; (ii) policies, procedures, processes, controls and compliance; and (iii) tax considerations.
Where we acquire debt or equity securities as all or part of the consideration for business development activities, such as in connection with a joint venture or acquisition, the value of those securities will fluctuate and may depreciate in value. We may not control the company in which we acquire securities, such as in connection with a collaborative arrangement, and as a result, we will have limited ability to determine its management, operational decisions, internal controls and compliance and other policies, which can result in additional financial and reputational risks.We may not be successful in separating underperforming or non-strategic assets, and gains or losses on the divestiture of, or lost operating income from, such assets may affect our earnings. Our divestitures also may result in continued financial exposure to the divested businesses, such as through guarantees or other financial arrangements, continued supply and services arrangements, or potential litigation, following the transaction. Under these arrangements, nonperformance by us could result in obligations being imposed on us that could have a material adverse effect on our competitive position, cash flows, results of operations, financial condition or reputation.We might also incur asset impairment charges related to acquisitions or divestitures that reduce our earnings. The value allocated to certain of our assets could be substantially impaired due to a number of factors beyond our control. New or revised accounting standards, rules and interpretations could result in changes to the recognition of income and expense that may materially and adversely affect our financial results.30
If the execution or implementation of acquisitions, divestitures, alliances, joint ventures and other portfolio actions is not successful, it could adversely impact our financial condition, cash flows and results of operations. Moreover, due to the substantial amount of debt that we incurred to finance the cash portion of the Celgene, MyoKardia and Mirati acquisitions, and intend to incur in connection with the Karuna and RayzeBio acquisitions, there can be no assurance of when we will be able to expand our business development capacity. Although we are committed to reducing our debt, pursuing strategic transaction opportunities in future may require us to obtain additional equity or debt financing, and could result in increased leverage and/or a downgrade of our credit ratings.
Failure to attract and retain highly qualified workforce could affect our ability to successfully develop and commercialize products.
Our success is largely dependent on our continued ability to (i) attract and retain highly qualified scientific, technical and management workforce, including people with expertise in clinical R&D, governmental regulation and commercialization, and (ii) in connection with our acquisitions, integrate corporate cultures and maintain employee morale. We are facing increasing competition for a limited pool of qualified individuals from numerous pharmaceutical and biotechnology companies, universities, government entities, research institutions, companies seeking to enter the healthcare space, and companies in other industries. We cannot be sure that we will be able to retain quality talent or that the costs of doing so will not materially increase.Market, Liquidity and Credit Risks
We have significant indebtedness that could have negative consequences .Our acquisitions of Celgene, MyoKardia and Mirati increased the amount of our debt resulting in additional interest expense, and we intend to incur more debt to finance future acquisitions, including the Karuna and RayzeBio acquisitions. This could reduce our financial flexibility to continue capital investments, develop new products and declare future dividends. For example, following the announcements of recent acquisitions, Standard & Poor’s downgraded BMS’s long term-credit rating from A+ to A (with a stable long-term credit outlook).Adverse changes in U.S. and global economic and political conditions could adversely affect our operations and profitability.Global economic and political risks pose significant challenges to a company’s growth and profitability and are difficult to mitigate. We generated approximately 30% of our revenues outside of the U.S. in 2023. As such, a global economic downturn could create or amplify a variety of risks to our business and could negatively affect our growth. In addition, uncertainty in the credit and capital markets could impact our growth strategy. Our revenues, earnings and cash flow are also exposed to risk from a strengthening U.S. dollar and global inflation, including in the U.S. If our operating costs were to significantly increase, whether as a result of rising inflation rates, wage increases or other factors, it could adversely affect our revenues and profitability. We also have exposure to customer credit risks in Europe, South America and other markets including from government-guaranteed hospital receivables in markets where payments are not received on time. We have significant operations in Europe, including for manufacturing and distribution. The results of our operations could be negatively impacted by any member country exiting the eurozone monetary union or EU. In particular, the exit of the UK from the EU, which occurred on January 31, 2020, created uncertainties affecting our business operations in the UK and the EU and may have an impact on our research, commercial and general business operations in the UK and the EU, including the approval and supply of our products and may require changes to our legal entity structure in the UK and the EU.
Additionally, our business and operations may be adversely affected by political volatility, conflicts or crises in individual countries or regions, including terrorist activities or war and pandemics or epidemics. The COVID-19 pandemic affected demand for some of our products driven by lower patient starts and visits, and we would expect any future pandemics to have a similar effect. In addition, while we did not experience any significant manufacturing or supply issues due to COVID-19, it is possible that we could experience these issues in response to future pandemics. For instance, we may experience scarcity of certain raw materials and components as a result of the influx of pandemic related vaccine orders receiving priority treatment from vendors. Furthermore, a future epidemic or pandemic could create material staffing shortages at our manufacturing sites which could disrupt the supply of our products. It is also possible that we may experience supply chain interruptions as a result of quarantines, shelter-in-place and other governmental orders and policies, travel restrictions, airline and cargo capacity and route reductions. We may also experience delays in the initiation and enrollment of patients in our clinical trials as a consequence of any future pandemic. We may not be able to fully mitigate these delays, which could negatively impact the timing of our pipeline development programs and expected future revenues and/or cash flows. A prolonged clinical trial delay could potentially have a significant negative effect on our business, particularly if new competitive products enter the market or clinical trial results for our competitors’ products affect the value proposition for our product. Any such delays or difficulties in clinical development could also potentially lead to a material impairment of our intangible assets, including the $27.1 billion of other intangible assets as of December 31, 2023.
We cannot predict or reasonably estimate the impact of any potential long-term changes to the healthcare industry from global economic and political events, including any future pandemics. For example, there is potential for a shift in the U.S. payer channel mix due to changes in patient coverage from the current economic crisis, but we are not able to reliably estimate what the impact would be on our results of operations given the highly variable and uncertain situation. It is also possible that changes in the
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healthcare system could impose additional burdens on clinical trials, which could increase the costs of sponsoring clinical trials or lead to additional delays or difficulties with completing clinical trials. We may also experience additional pricing pressures and/or increased governmental regulation.
Global economic conditions or events such as wars or pandemics also create additional risks from their impact on our suppliers, vendors, outsourcing partners, alliance partners and other third parties that we rely on to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, selling, human resource, finance, IT and other business unit and functional services. For example, if any of our third-party providers suffer from limited solvency because of global economic conditions, it could negatively impact our operating model and our business. Similarly, global events such as the Ukraine-Russia conflict can increase the volatility of the financial markets, foreign currency exchanges and interest rates. We could also face potential other negative consequences stemming from future pandemics or global events, including but not limited to increased cyber threats to us and our partners such as cyber attacks and outages. It is possible that global economic and political events, including any future pandemic, could exacerbate any of the other risks described in this 2023 Form 10-K as well.There can be no guarantee that we will pay dividends or repurchase stock.The declaration, amount and timing of any dividends fall within the discretion of our Board. The Board’s decision will depend on many factors, including our financial condition, earnings, capital requirements, debt service obligations, industry practice, legal requirements, regulatory constraints and other factors that our Board may deem relevant. A reduction or elimination of our dividend payments or dividend program could adversely affect our stock price. In addition, we could, at any time, decide not to buy back any more shares in the market, or reduce the number of shares repurchased under our share repurchase program, which could also adversely affect our stock price. The IRA imposes a 1% excise tax on our net repurchases of shares after December 31, 2022. The imposition of the excise tax on repurchases of our shares may increase the cost to us of making repurchases and may cause our Board to reduce the number of shares repurchased pursuant to our share repurchase program.Our amended bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain lawsuits between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum that it finds favorable for such lawsuits and make it more costly for our stockholders to bring such lawsuits, which may have the effect of discouraging such lawsuits.
Our amended bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, creditors or other constituents, (iii) action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our amended and restated certificate of incorporation or our amended bylaws or (iv) action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding will be another state or federal court of the State of Delaware. Our bylaws also provide that any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and consented to this forum selection provision.
The Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, another state or federal court of the State of Delaware) will have the fullest authority allowed by law to issue an anti-suit injunction to enforce this forum selection clause and to preclude suit in any other forum. However, this forum selection provision is not intended to apply to any actions brought under the Securities Act of 1933 (the "Securities Act"), as amended, or the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, the forum selection provision in our amended bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.Nevertheless, this forum selection provision in our bylaws may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers and other employees, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. In addition, stockholders who do bring a claim in the Court of Chancery in the State of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. While we believe the risk of a court declining to enforce the forum selection provision contained in our amended bylaws is low, if a court were to find the provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
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FY 2025-12-31 (later)
Item 1A. RISK FACTORS.
Any of the risks and uncertainties described below could significantly and negatively affect our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings now and in the future, which could cause the trading price of our common stock to decline significantly. Additional risks and uncertainties that are not presently known to us, or risks that we currently consider immaterial, could also impair our business operations, financial condition, operating results or cash flows. The following discussion of risk factors contains “forward-looking” statements, as discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Special Note Regarding Forward-Looking Statements.”
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.Our products continue to be subject to increasing pressures across the portfolio from pharmaceutical market access and pricing controls, required rebates and other discounts, 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. We expect that these market access constraints, pricing controls and discounting and other restrictions will become more acute as public and private payers continue to take aggressive steps to control their expenditures. Our future revenues and profit margins could be negatively affected, including as a result of (i) changes in laws, agreements and regulations relating to the pricing and reimbursement of pharmaceutical products (including potential penalties for increasing prices over the rate of inflation and government negotiations/price controls that may change the determination of the "best price" and establish a maximum allowed price/reimbursement rate), as well as other changes relating to federal healthcare programs, such as modifying the federal Anti-Kickback statute discount safe harbor, OBBBA and the IRA, which includes a number of provisions intended to lower the costs of some drugs covered under Medicare Part D and Medicare Part B and to limit Medicare beneficiaries’ out-of-pocket spending under the Medicare Part D benefit, (ii) expanded utilization and pharmaceutical company restrictions under the 340B Drug Pricing Program ("340B program"), (iii) cost-cutting measures by federal healthcare programs, such as Medicare and Medicaid, MCOs and other institutional and governmental purchasers, (iv) the grant of additional authority to governmental agencies to manage drug utilization and negotiate drug prices (including the implementation of the 2020 regulation issued by the U.S. federal government authorizing states and private parties to develop and implement programs to import certain prescription drugs from Canada and sell them in the U.S., and the American Rescue Plan Act of 2021, which eliminated the Medicaid Prescription Drug Rebate cap as of January 1, 2024), (v) competition related to placements on applicable commercial and Medicare Part D formularies; (vi) changes to U.S. federal pharmaceutical coverage and reimbursement policies and practices, (vii) the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid and private sector beneficiaries, (viii) the increased scrutiny of drug manufacturers (including any additional review of the Company by the United States Congress), (ix) reimbursement delays, (x) government price erosion mechanisms across Europe, Japan and in other countries resulting in deflation for pharmaceutical product pricing, (xi) collection delays or failures to pay in government-funded public hospitals outside the U.S., (xii) developments in technology and/or industry practices that could impact the reimbursement policies and practices of third-party payers, and (xiii) inhibited market access due to real or perceived differences in value propositions for our products compared to competing products.
In particular, the IRA has and will continue to have the effect of reducing prices and reimbursements for certain of our products, which could significantly impact our business. Under the IRA, the HHS can effectively set prices for units of certain single-source drugs and biologics reimbursed under Medicare Part B, Medicare Advantage and Part D. Generally, these government prices apply nine years (for small molecule drugs) or 13 years (for biologics) following FDA approval and will be capped at a statutory ceiling price that is likely to represent a significant discount from average prices to wholesalers and direct purchasers. In August 2024, as part of the first round of government price setting pursuant to the IRA, the HHS announced the "maximum fair price" for a 30-day equivalent supply of Eliquis, which applies to the U.S. Medicare channel effective January 1, 2026. In November 2025, the HHS announced the "maximum fair price" for a 30-day supply of Pomalyst, which applies to the U.S. Medicare channel effective January 1, 2027. In January 2026, the HHS selected Orencia as a medicine subject to "negotiation" for government-set prices beginning in 2028. It is possible that more of our products could be selected in future years based upon the selection criteria currently utilized by the HHS or potentially expanded future criteria, or that the "maximum fair price" for our previously selected products could be renegotiated, each of which could, among other things, accelerate revenue erosion prior to expiry of intellectual property protections. Failure to comply with requirements under the price setting process is subject to an excise tax and/or a civil monetary penalty. The IRA also generally requires drug manufacturers to provide rebates for Medicare Part B and Part D medicines if the price of a Part B or Part D drug increases faster than the rate of inflation. As of January 2025, under the IRA, the Part D benefit redesign replaced the 70 percent CGDP discount with a 10 percent manufacturer discount for all Medicare Part D beneficiaries that have met their deductible and incurred out of pocket drug costs below a $2,000 threshold and a 20 percent discount for beneficiaries that have incurred out of pocket drug costs above the $2,000 threshold under the new Part D benefit redesign. The effectuation of a "maximum fair price" pursuant to the IRA is a technically complex process that relies on newly developed systems that may experience24unforeseen disruptions. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties, which could be significant. The IRA has and will continue to meaningfully impact our business strategies and those of others in the pharmaceutical industry. 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.
In December 2025, we announced the U.S. Government Agreement pursuant to which we agreed to, among other things: (i) provide Eliquis for free to the Medicaid program effective January 1, 2026; (ii) donate more than seven tons of Eliquis API to fill the U.S. Strategic Active Ingredient Reserve; (iii) enable direct-to-patient access to Sotyktu, Zeposia, Reyataz, Baraclude and Orencia for cash-paying patients at discounts approximately 80% off current list prices; (iv) adopt a more balanced pricing approach for new launches across developed nations; and (v) continue to expand domestic production. In accordance with the U.S. Government Agreement, BMS will receive certain U.S. tariff relief until January 2029 and will not be subject to future pricing mandates in the United States, however, such exemptions may be terminated or may not be extended. We remain subject to any current or future pricing mandates implemented outside of the United States, and it is possible that current or future pricing regulations may result in a material impact on our business and results of operations. This agreement, and any potential future agreements with government entities, by us or our competitors, could result in reduced prices and reimbursement for certain of our or competing products and may impact our cash flows and results of operations.
In July 2025, the OBBBA was enacted which, among other things, aims to achieve efficiencies in U.S. federal government healthcare spending over the next decade, primarily within Medicaid. We are continuing to assess the full scope of this legislation and its potential commercial implications, and it is possible that these changes may impact our cash flows and results of operations.
We participate in the 340B program, under which we must offer covered outpatient drugs to statutorily defined covered entities at no more than the 340B program “ceiling price”. The expanded utilization of the 340B program in recent years has negatively affected our revenues and profit margins. Additionally, manufacturers who are found to have knowingly and intentionally overcharged 340B program covered entities could be subject to significant monetary penalties. In the past, Celgene had received inquiries from the Health Resources and Services Administration regarding the limited distribution networks for Revlimid, Pomalyst, and Thalomid and compliance with the 340B program. As part of our broader integration strategy and alignment of our distribution model (post our acquisition of Celgene) we had announced that beginning March 1, 2022, we would generally recognize up to two designated 340B program contract pharmacy locations per 340B program hospital that lacks an entity-owned pharmacy. We then updated this policy effective July 1, 2024, to generally recognize up to four contract pharmacy locations per 340B program hospital that lacks an entity-owned pharmacy. Multiple states have enacted laws generally prohibiting manufacturer policies restricting recognition of contract pharmacy arrangements and provide for certain penalties for violations. Such laws have been subject to legal challenges. Whether or how such laws may impact our business remains uncertain. Although we believe that we have complied with, and continue to comply with, all applicable legal requirements, additional legal or legislative changes with respect to the 340B program may cause us to update our approach. Significant changes to our sales or pricing practices with regard to the distribution of drugs under the 340B program, an inability to procure data sufficient to identify duplicate claims associated with the increasing volume of 340B program utilization or any material changes in our U.S. payer channel mix, including the commercialization of future products that may be hi ghly utilized within the 340B program, could have additional adverse effects on our revenues and profitability. In addition, if we are required to pay penalties under the applicable regulations, there would be an adverse effect on our revenues and profitability. For additional information on pricing pressures and other constraints, refer to “Item 1. Business—Pricing, Price Constraints and Market Access.”
At the state level, multiple states have passed, are pursuing or are considering government action via legislation or regulations to change drug pricing and reimbursement (e.g., establishing prescription drug affordability boards, implementing manufacturer mandates tied to the Federal Public Health Service Act drug pricing program, etc.). Some of these state-level actions 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 Act drug pricing program, certain states have enacted laws regulating manufacturer pricing obligations under the program to date. Several additional states are considering similar potential legislation or other government actions, and we expect other states may do the same in the future. Further, commercial payers often consider Medicare coverage policy and payment limitations when setting their own payment rates. Any reduction in cost or other containment measures may similarly be adopted by commercial plans. Coverage policies and reimbursement rates for commercial plans may change at any time.
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We may experience difficulties or delays in the development and commercialization of new products. Our ability to replace revenue from products that lose patent protection is directly dependent on our ability to successfully develop and commercialize new products in a timely manner.
As is common in the pharmaceutical industry, BMS expects that sales of its branded products like Orencia, Eliquis and Opdivo will decline after the loss of market exclusivity for such products. Consequently, our future success is highly dependent on our pipeline of new products. There is a high rate of failure inherent in the research and development process for new drugs. As a result, there is a high risk that our investments in research programs will not generate financial returns. Compounds or products may appear promising in development but fail to reach market within the expected timeframe, or at all. We have experienced setbacks and may continue to do so.
In addition, product extensions or additional indications may not be approved. Furthermore, products or indications approved under the U.S. FDA’s Accelerated Approval Program may be contingent upon verification and description of clinical benefit in confirmatory studies and such studies may not be successful. For additional information, refer to "Item 1. Business—Products, Intellectual Property and Product Exclusivity".
Developing and commercializing new compounds and products involves inherent risks and uncertainties, including (i) efficacy and safety concerns or findings of superior safety or efficacy of competing products; (ii) delayed or denied regulatory approvals, including as a result of difficulties in enrolling patients and completing clinical trials in a timely manner; (iii) delays or challenges with producing products on a commercial scale or excessive costs to manufacture products; (iv) failure to enter into or implement optimal alliances for the development and/or commercialization of new products; (v) changes in regulatory approval processes and policies which may cause delays or denials of new product approvals; (vi) preclusion from commercialization due to intellectual property issues or disputes with third parties; (vii) failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product; and (viii) changing clinical preferences, changing industry standards, laws and regulations, or competitors’ innovations, each of which may render new products or enhancements to existing products obsolete.
We are also unable to predict if and when any changes to laws or regulatory policies will occur and how they will affect our business and particularly our pipeline of new products.
Commercialization launch delays are especially common when a product is expected to have a REMS program, as required by the FDA to address significant risk/benefit issues. Certain of our future key products may be required to be distributed in the U.S. through a REMS program, as described in "Item 1. Business—Marketing, Distribution and Customers". The inability to bring a product to market or a significant delay in the expected regulatory approval and related launch date of a new product could negatively impact our revenues and earnings. In addition, if certain acquired pipeline programs are canceled or we believe their commercial prospects have been reduced, we may recognize material non-cash impairment charges for those programs as we have done in the past. Finally, losing key molecules and intermediaries or our compound library through a natural or man-made disaster or act of sabotage could negatively impact the product development cycle.
We can provide no assurance when or whether any of our products under development will be approved or launched or whether any products, once launched, will be commercially successful. The public announcement of data from our clinical studies, or those of our competitors, or news of any developments related to our, or our competitors’, products or late-stage compounds may cause significant volatility in our stock price and depending on the data, may result in an adverse impact on our business, financial condition or results of operations. If the development of any of our key late-stage product candidates is delayed or discontinued or a clinical study does not meet one or more of its primary endpoints, our stock price could decline significantly and there may be an adverse impact on our business, financial condition or results of operations. As a result, we may experience difficulties in forecasting our future performance and effectively communicating our strategy to investors.
We must maintain a continuous flow of successful new products and successful new indications for existing products sufficient both to cover our substantial research and development costs and to replace sales that are lost as profitable products lose market exclusivity or are displaced by competing products or therapies. Failure to do so in the short-term or long-term can have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects. We may also choose to no longer pursue certain programs from time to time as we periodically review our research and development programs and seek to prioritize our pipeline investments. This may result in further uncertainty as to when potential new products will be approved and commercialized. There can be no assurance that our key product candidates would prove to be safe and effective or as safe and effective as other competing products, or that, even if approved, any such products will become commercially successful for all approved indications.We could lose market exclusivity of a product earlier than expected.
In the pharmaceutical and biotechnology industries, the majority of an innovative product’s commercial value is realized during its market exclusivity period. In the U.S. and in some other countries, when market exclusivity expires and generic versions are approved and marketed or when biosimilars are introduced (even if only for a competing product), there are usually very substantial and rapid declines in a product’s revenues.26Market exclusivity for our products is based upon patent rights and certain regulatory forms of exclusivity. The scope of our patent rights, if any, varies from country to country and may also be dependent on the availability of meaningful legal remedies in a country. The failure to obtain or maintain patent and other intellectual property rights, or limitations on the use or loss of such rights, could result in a rapid loss of sales for any affected products which could be material to us. In some countries, including certain EU member states, basic patent protections for our products may not exist because certain countries did not historically offer the right to obtain specific types of patents, and/or we (or our licensors) did not file in those countries. In addition, the patent environment can be unpredictable, and the validity and enforceability of patents cannot be predicted with certainty. For example, for Eliquis, generics have challenged the composition of matter patents and related SPCs in various jurisdictions, and trials have taken place, or are scheduled to take place, in certain European countries. While these legal proceedings are pending, generic manufacturers have begun marketing generic versions of Eliquis in certain EU countries and may seek to market generic versions of Eliquis in other EU countries prior to the expiration date of applicable patents and related SPCs. Furthermore, manufacturers of innovative drugs as well as generic drug manufacturers may be able to design their products around our owned or licensed patents and compete with us using the resulting alternative technology. Absent relevant patent protection for a product, once the regulatory exclusivity period expires, generic or alternative versions can be approved and marketed.
Generic and biosimilar product manufacturers as well as other groups seeking financial gain are also increasingly seeking to challenge patents before they expire, and we have faced and may continue to face earlier-than-expected competition for any products at any time. Patents covering our key products have been, and are likely to continue to be, subject to validity, enforceability and infringement challenges in patent litigations and post-grant review patent office proceedings. Although we are confident in the strength of our intellectual property rights, it may be possible for generic drug companies to challenge our rights and launch their generic versions of our drugs "at risk" prior to the expiration of our intellectual property rights. For example, following certain adverse judicial decisions in the UK and Finland, generic manufacturers have begun marketing generic versions of Eliquis in these countries, and may seek to market generic versions of Eliquis in additional countries in Europe, prior to the expiration of our patents, which may lead to additional infringement and invalidity patent actions in Europe. In addition, in order to avoid the uncertainty and expense of litigation, among other reasons, we may decide to enter into settlements with generic manufacturers that permit generic market entry prior to the expiration of our intellectual property rights. For example, as a result of patent settlements, generic entry for Revlimid in the UK began on January 18, 2022, and in various other European countries on February 18, 2022. Similarly, in the U.S., following patent settlements, certain companies have begun marketing generic lenalidomide pursuant to licenses, which as of January 31, 2026, are no longer volume-limited.
In some cases, manufacturers may seek regulatory approval by submitting their own clinical study data to obtain marketing approval or choose to launch a generic product “at risk” before the expiration of the applicable patent(s) and/or before the final resolution of related patent litigation. In addition, some countries are allowing manufacturers to manufacture and sell generic products, which negatively impacts the protections afforded the Company. Lower-priced generics or biosimilars for BMS biologics or competing biologics could negatively impact our volumes and prices.
In addition, both the U.S. Congress and the FDA have taken steps to promote the development and approval of generic drugs and biosimilar biologics, including by providing generic and biosimilar developers a private right of action to obtain sufficient quantities of drug samples from the reference product’s manufacturer in order to conduct testing necessary to obtain approval for generic or biosimilar products. Additionally, in October 2025, the FDA issued new draft guidance to streamline the process of, and accelerate the timeline for, biosimilar development, including by minimizing the requirement for comparative clinical efficacy studies.
There is no assurance that a particular product will enjoy market exclusivity for the full time period that appears in the estimates disclosed in this 2025 Form 10-K or that we assume when we provide our financial guidance.
We face intense competition from other biopharmaceutical companies and manufacturers and expect to see increasing market penetration of lower-priced generic products.
The future growth of BMS is dependent on the market access, uptake and expansion for marketed brands, new product introductions, new indications, new formulations and co-promotional activities with alliance partners. Competition is keen, and as we lose exclusivity for some of our marketed brands, lower-priced generic products will increasingly penetrate our markets. Generic or biosimilar challenges to our products can also arise at any time, and our patents may not prevent the emergence of generic or biosimilar competition for our products. In some countries, patent protection is significantly weaker than in the U.S. or in the EU; political and social pressure has also pushed legislation and other measures that promote the use of generic and biosimilar products. For additional information, see “—We could lose market exclusivity of a product earlier than expected.”
In addition, we face competition from new products entering the market. New products may have (i) lower prices, (ii) superior efficacy (benefit) or safety (risk) profiles (whether actual or perceived), (iii) technological advantages that may make such products more convenient to use, (iv) better insurance coverage or reimbursement levels, (v) more effective marketing programs and/or other differentiating factors that make it harder for our products to compete. We cannot predict with accuracy the timing or impact of the
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introduction of competitive products that treat diseases and conditions like those treated by our products and product candidates. Business combinations among our competitors and major third-party payers may also increase competition for our products. If we are unable to compete successfully against our competitors’ products in the marketplace, this could have a material negative impact on our revenues and earnings.
We could experience difficulties, delays and disruptions in our supply chain as well as in the manufacturing, distribution and sale of our products.
Our product supply and related patient access has been, and could in the future be, negatively impacted by difficulties, delays and disruptions in the manufacturing, distribution and sale of our products. Some of the difficulties, delays and disruptions include: (i) product seizures or recalls or forced closings of manufacturing plants; (ii) our failure, or the failure of any of our vendors or suppliers, to comply with cGMP and other applicable regulations or quality assurance guidelines that could lead to manufacturing shutdowns, product shortages or delays in product manufacturing; (iii) manufacturing, quality assurance/quality control, supply problems or governmental approval delays; (iv) geopolitical factors in a specific country or region, including any new, or changes in or interpretations of existing, trade regulations, including for example, any new tariffs imposed in the jurisdictions in which we operate, or compliance requirements of other legislation; (v) the failure of a supplier, including sole source or single source suppliers, to provide us with the necessary raw materials, supplies or finished goods within a reasonable timeframe and with required quality; (vi) the failure of a third-party manufacturer to supply us with bulk active or finished product on time; (vii) construction or regulatory approval delays for new facilities or the expansion of existing facilities, including those intended to support future demand for our biologics products; (viii) the failure to meet new and emerging regulations requiring products to be tracked throughout the distribution channels using unique identifiers to verify their authenticity in the supply chain; (ix) other manufacturing or distribution issues, including limits to manufacturing capacity and changes in the types of products produced, such as biologics, physical limitations, labor disputes or shortages, or other business interruptions; and (x) disruptions in supply chain continuity, including from market forces, natural disasters, global disease outbreaks or pandemics, acts of war or terrorism or other unforeseeable or unavoidable events that materially impact one or more of our facilities or a critical supplier.
The U.S. and other countries have recently imposed, and may continue to impose, new tariffs. While pharmaceuticals are largely exempt from the tariffs imposed in 2025, such exemptions may be terminated or may not apply to any future tariffs. In accordance with the U.S. Government Agreement, BMS will receive certain U.S. tariff relief until January 2029. We continue to evaluate the impacts of tariffs on our business and results of operations, and it is possible that such tariffs, or future tariffs, may result in a material impact on our business and results of operations.
In addition, manufacturing processes for novel cell-based therapies, such as CAR-T cell therapies, and radiopharmaceutical therapeutics in development are still evolving, and our processes may be more complicated or more expensive than the approaches taken by our current and future competitors. Our ability to source raw materials and supplies used to manufacture our CAR-T cell therapies and to develop consistent and reliable manufacturing processes and distribution networks with an attractive cost of goods could impact future anticipated revenue and gross profit for our CAR-T cell therapies. For our radiopharmaceutical therapeutics, we utilize third-party suppliers that may still be developing appropriate processes, controls, technologies and facilities, particularly for large-scale production. Furthermore, we may face challenges with sourcing raw materials and supplies for clinical and, if approved, commercial manufacturing. Logistical and shipment delays and other factors not in our control could prevent or delay the delivery of our product candidates and marketed products to patients, including for our radiopharmaceutical therapeutics, which have time-limited stability once manufactured. Additionally, we are required to maintain a complex chain of identity and custody with respect to patient material as such material enters into and moves through the manufacturing process. As a result, even slight deviations at any point in the production process for our CAR-T cell therapies or in material used in our CAR-T cell therapies could result in loss of product or regulatory remedial action, which could adversely affect our future anticipated revenues and/or profitability related to our CAR-T cell therapies.Regulatory, Intellectual Property, Litigation, Tax and Legal Compliance Risks
Litigation claiming infringement of intellectual property may adversely affect our future revenues and operating earnings.
We and certain of our subsidiaries are, and in the future may be, involved in various legal proceedings, including patent litigation, such as claims that our patents are invalid, unenforceable and/or do not cover the product of the generic drug manufacturer or where third parties seek damages and/or injunctive relief to compensate for alleged infringement of their patents by our commercial or other activities. Resolving an intellectual property infringement or other claim can be costly and time consuming and may require us to enter into license agreements, which may not be available on commercially reasonable terms. A successful claim of patent or other intellectual property infringement could subject us to significant damages and/or an injunction preventing the manufacture, sale, or use of the affected product or products. Any of these events could have a material adverse effect on our profitability and financial condition.28
Legal matters could negatively affect our business.
Current or future lawsuits, claims, proceedings and government investigations could preclude or delay the commercialization of our products or could adversely affect our operations, profitability, liquidity or financial condition, after any possible insurance recoveries where available. Such legal matters include (i) intellectual property disputes; (ii) adverse decisions in litigation, including product safety and liability, consumer protection and commercial cases; (iii) matters related to anti-corruption or anti-bribery regulations, such as the U.S. Foreign Corrupt Practices Act or the UK Bribery Act, including compliance with ongoing reporting obligations to the government resulting from any settlements; (iv) recalls or withdrawals of pharmaceutical products or forced closings of manufacturing plants; (v) the alleged failure to fulfill obligations under supply contracts with the government and other customers or under other agreements relating to our business; (vi) product pricing and promotional matters; (vii) lawsuits and claims asserting, or investigations into, violations of securities, antitrust, Federal and state pricing, consumer protection, data privacy and other laws and regulations; (viii) environmental, health, safety and sustainability matters, including regulatory actions in response to climate change; and (ix) tax liabilities resulting from assessments from tax authorities.We are subject to a variety of U.S. and international laws and regulations.We are currently subject to a number of government laws and regulations and, in the future, could become subject to new government laws and regulations. The costs of compliance with such laws and regulations, or the negative results of non-compliance, could adversely affect our business, our operating results and our financial condition. These laws and regulations control and regulate key aspects of our business, including, but not limited to: (i) market access, pricing controls and discounting; (ii) tax liabilities, returns and payments; (iii) imports and other trade restrictions; (iv) intellectual property protection and enforcement; (v) good practice guidelines and regulations; (vi) accounting standards; (vii) cybersecurity and data protection, storage and privacy, particularly in the EU and the U.S.; (viii) artificial intelligence, machine learning, automated decision-making, data governance, and related technologies; (ix) requirements for reporting payments and other value transfers to healthcare professionals (such as those provided under the Federal Anti-Kickback Statute); and (x) compliance with anti-bribery and anti-corruption practices of the U.S. and other countries.
In addition, the U.S. healthcare industry is highly regulated and subject to frequent and substantial changes, including as a result of new judicial or governmental decisions. For example, Congress passed the Food and Drug Omnibus Reform Act in December 2022, which gave the FDA additional authority to require confirmatory trials to be underway at the time of approval and offered an additional enforcement mechanism if sponsors do not complete such studies with due diligence. Additionally, pharmacy benefit manager practices have come under increased scrutiny from U.S. policymakers at the federal and state level, who have proposed legislation intended to address concerns regarding the impact that these intermediaries have on drug pricing and patients’ out of pocket costs. If promulgated, such legislation could have resultant implications, costs or consequences for our business and how we interact with these entities. We cannot predict how other future federal or state legislative or administrative changes relating to healthcare reform will affect our business. For additional information, refer to “Item 1. Business—Government Regulation,” “Item 1. Business—Pricing, Price Constraints and Market Access” and “—Legal matters could negatively affect our business.” Similarly, the legislative and regulatory environment regarding cybersecurity, data protection, storage and privacy is continuously evolving and the subject of significant attention by regulators and private parties globally. Regulators are imposing new cybersecurity and data protection, storage and privacy requirements, including new and greater monetary fines or penalties for privacy violations, and jurisdictions where we operate have passed, or continue to propose, data privacy legislation and or regulations. Failure to comply with these laws could result in significant penalties, including potential exclusion from federal healthcare programs, and reputational harm and could have a material adverse effect on our business and results of operations.Expectations relating to environmental, social and governance considerations and related reporting obligations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.There is an increased focus by foreign, federal, state, and local regulatory and legislative bodies, investors and other stakeholders regarding environmental sustainability and social impact policies relating to climate change, regulating greenhouse gas emissions, carbon taxes, emissions trading schemes, sustainability, human rights, inclusion and other policy matters, and disclosure regarding the foregoing, many of which may be ambiguous, inconsistent, dynamic or conflicting. We expect to experience or be subject to increased restrictions, compliance and assurance costs, recurring investments in data gathering and reporting systems, and legal expenses related to such new or changing legal or regulatory requirements, which could increase our operating costs. In addition, we may still be subject to penalties or potential litigation if such laws and regulations are interpreted or applied in a manner inconsistent with our practices.
Moreover, from time to time we establish and publicly announce environmental, social and governance aspirational goals and commitments. Implementation of our environmental, social and governance aspirational goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside of our control. In addition, some stakeholders may disagree with the Company’s environmental, social and governance aspirational goals, targets or objectives. If we do not meet, are perceived not to meet, or if stakeholders disagree with, our environmental, social and governance aspirational goals, targets or objectives, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our
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brand and reputation, reduced demand for our products, inability to attract and retain employee talent or other negative impacts on our business and operations.Changes to tax regulations could negatively impact our earnings.We are subject to income taxes in the U.S. and various other countries globally. Changes in tax laws and regulations can and do occur. Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are periodically examined by various tax authorities. We have faced, and may continue to face, audit challenges on how we apply a tax law or regulation. The ultimate resolution of any tax matter may result in payments greater or less than amounts accrued, which could have a negative impact on our provision for income taxes. In addition, our future earnings could be negatively impacted if our tax strategies are ineffective or by further changes in tax legislation, including changes in tax rates and tax base such as limiting, phasing-out or eliminating deductions or tax credits, increase taxing of certain excess income from intellectual property, revising tax law interpretations in domestic or foreign jurisdictions, changes in rules for earnings repatriations and changes in other tax laws in the U.S. or other countries. This includes Pillar Two legislation that has been enacted pursuant to the OECD/G20 Inclusive Framework in various jurisdictions in which we operate. These rules and associated legislative changes may significantly impact our tax provision and results of operations.The failure of third parties to meet their contractual, regulatory and other obligations could adversely affect our business.We rely on suppliers, vendors, outsourcing partners, alliance partners and other third parties to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, human resource, finance, IT, data and other business unit and functional services and meet their contractual, regulatory and other obligations. Using these third parties poses a number of risks, such as: (i) they may not perform to our standards or legal requirements, for example, in relation to the outsourcing of significant clinical development activities for innovative medicines to some contract research organizations; (ii) they may not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) they may experience a cyber attack or business disruption; (vi) they may be subject to government orders or mandates that require them to give priority to the government and set aside pre-existing commercial orders; (vii) disputes may arise with respect to ownership of rights to technology developed with our partners; and (viii) disagreements could cause delays in, or termination of, the research, development or commercialization of the product or result in litigation or arbitration. Moreover, some third parties are located in markets subject to political and social risks, corruption, infrastructure problems and natural disasters, in addition to country specific privacy and data security risks given current legal and regulatory environments. The failure of any critical third party to satisfactorily meet its obligations, including for future royalty and milestone payments; to adequately deploy business continuity plans in the event of a crisis; and/or to satisfactorily resolve significant disagreements with us or address other factors, could have a material adverse impact on our business and results of operations. In addition, if these third parties violate, or are alleged to have violated, any laws or regulations, including the local pharmaceutical code, anti-corruption or anti-bribery regulations, the EU’s General Data Protection Regulation, securities laws, or other laws and regulations, during the performance of their obligations for us, we could suffer financial and reputational harm or other negative outcomes, including possible legal consequences.Product labeling changes for our marketed products could result in a negative impact on revenues and profit margins.Pharmaceutical products receive regulatory approval based on data obtained in controlled clinical trials of limited duration. Data generated after initial approval and regulatory changes to standards regarding safety, efficacy or labeling may result in product label changes or other measures that could reduce the product’s market acceptance and result in declining revenues. These include additional clinical trials, such as head-to-head studies against alternative or emerging standard of care, studies that generate data in specific populations or identify biomarkers (objective characteristics that can indicate a particular response to a product or therapy) as well as real-world data analyses and post-approval safety surveillance following the use of our products over longer periods of time. Sometimes additional information from new studies identifies a portion of the patient population that may be non-responsive to a medicine or would be at higher risk of adverse reactions and labeling changes based on such studies may limit the patient population. The studies providing such additional information may be sponsored by us, but they could also be sponsored by competitors, insurance companies, government institutions, MCOs, scientists, investigators or other interested parties. While additional safety and efficacy information from such studies assist us and healthcare providers in identifying the best patient population for each product, it can also negatively impact our operating results. New information added to a product’s label can affect its risk-benefit profile, leading to potential voluntary or mandatory recalls, withdrawals or declining revenue, as well as legal claims, including product liability, consumer fraud or other claims. For example, in November 2023, the FDA announced that it was investigating the risk of T-cell malignancies in patients who received treatment with CAR-T cell therapy, noting that the overall benefits of CAR-T cell therapy products continue to outweigh their potential risks for their approved uses. In January 2024, the FDA determined that safety labeling changes were needed for approved CAR-T cell therapies, including a “boxed warning” about the possible risk of T-cell malignancies in patients treated with CAR-T cell therapy. Additionally, certain study results, especially from head-to-head studies, could affect a product’s formulary listing, which could also adversely affect revenues.In addition, if safety or efficacy concerns are raised about a third party's product in the same class as one of our products, those concerns could implicate the entire class and this, in turn, could have an adverse impact on the availability or commercial viability of our product(s) as well as other products in the class.30The illegal distribution and sale by third parties of counterfeit or unregistered versions of our products or stolen products could have a negative impact on our revenues, earnings, reputation and business.Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet our rigorous manufacturing and testing standards and often do not contain the correct ingredients. A patient who receives a counterfeit drug or a product diverted from its authorized market may be at risk for a number of dangerous health consequences. Our reputation and business could suffer harm as a result of counterfeit drugs sold under our brand name or diverted products. The prevalence of counterfeit medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce, greatly enhancing consumers’ ability to obtain prescriptions and other medical treatments via the internet in lieu of traditional brick and mortar pharmacies. The internet exposes patients to greater risk as it is a preferred vehicle for dangerous counterfeit offers and scams because of the anonymity it affords illegal traders and counterfeiters, and its use can result in the circumvention of controls designed to protect patients.
Thefts of inventory at warehouses, plants or while in-transit, which are then not properly stored and are later sold through unauthorized channels that do not adhere to customary supply chain standards, could adversely impact patient safety, our reputation and our business. In addition, diversion of products from their authorized market into other channels may result in reduced revenues and negatively affect our profitability.
Use of social media platforms can present risks and challenges.
We use social media to communicate Company news and events. The inappropriate and/or unauthorized use of social media could cause brand damage or information leakage and may give rise to liability, including from the improper promotion of a product or the improper collection and/or dissemination of personally identifiable information from employees, patients, healthcare professionals or other stakeholders. In addition, negative or inaccurate posts or comments about us on any social networking website could damage our reputation, brand image and goodwill and may cause significant volatility in our stock price. Further, the disclosure of non-public Company-sensitive information by our workforce or others, whether intentional or unintentional, through social media and other messaging channels could lead to loss of trade secrets or other intellectual property, as well as the Company’s commercially sensitive information.Information Technology and Cybersecurity RisksWe are dependent on information technology systems, including artificial intelligence programs, and face risk of cybersecurity incidents that could disrupt our business and result in theft of proprietary, confidential and personal information.
We rely extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided by and/or used for third parties or their vendors, to assist in conducting our business. We have faced, and will continue to face, risks of incidents, whether through cyber attacks or cyber intrusions through the Cloud, the Internet, phishing attempts, ransomware and other forms of malware, computer viruses, email attachments, extortion, exfiltration and other scams. Although we make efforts to maintain the security and integrity of our information technology systems and data, these systems and the proprietary, confidential and personal information that resides on or is transmitted through them, are subject to the risk of a cybersecurity incident or disruption, and there can be no assurance that our security efforts and measures, and those of our third-party vendors, will prevent breakdowns or incidents to our or our third-party vendors’ systems, which could adversely affect our business strategy, results of operations, or financial condition. Cybersecurity risks continue to develop, including as a result of threat actors increasingly targeting employees and supply chains and geopolitical tensions leading to an increase in sabotage, espionage and cyber attacks . As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they may remain undetected for a period of time. A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems, including artificial intelligence programs that we utilize, or leak, theft or misuse of proprietary, confidential or personal information could negatively impact operations. There can be no assurance that our continuing efforts will prevent breakdowns or incidents to our or our third-party providers’ systems or databases that could adversely affect our business. Under certain circumstances, such incidents when detected could require disclosure to government authorities and/or regulators and could require notification to impacted individuals, and any such incident could result in material financial, legal, business and reputational harm to us. Further, although we maintain insurance coverage designed to transfer certain cybersecurity incident costs, there is a risk this insurance would be insufficient to cover the costs of the incident, including due to coverage limits or insurance exclusions.
In addition, we face certain risks as we seek to leverage artificial intelligence programs and machine learning (“AI”) to optimize productivity and efficiency in various aspects of the organization. For example, flawed algorithms and/or biased, incomplete or inaccurate data used in AI programs may result in deficient AI-generated content. Additionally malfunctions or outages of these systems, certain of which are managed, hosted or provided by third parties, may result in operational disruptions, data loss, or inaccurate content. The regulatory landscape related to AI remains uncertain, and we may be required to devote significant resources to comply with developing laws and address ethical concerns. Our competitors may also develop or adopt more effective AI technologies, resulting in more efficient operations and putting us at a competitive disadvantage. These risks may result in an adverse impact on our business, financial condition or results of operations.
31Strategic, Business Development and Employee Attraction and Retention Risks
We depend on several key products for most of our revenues, cash flows and earnings.We derive a majority of our revenue and earnings from several key products. We expect that Eliquis, Opdivo, Opdivo Qvantig, Orencia, Reblozyl and Yervoy will represent a significant percentage of our revenue, earnings and cash flows during the next few years. A reduction in revenue from any of these products due to loss of market exclusivity or other factors could adversely impact our earnings and cash flows. For additional information, see “—We could lose market exclusivity of a product earlier than expected.”
Also, if one of our major products were to become subject to issues, such as loss of patent protection, significant changes in demand, formulary access changes, material product liability, unexpected side effects, regulatory proceedings, negative publicity, supply disruption from our manufacturing operations or third-party supplier or a significant advancement of competing products, we may incur an adverse impact on our business, financial condition, results of operations or the trading price of our stock.
In addition, in the U.S., most of our products are distributed through wholesalers, and if one of these wholesalers should encounter financial or other difficulties, we might be unable to timely collect the amounts that the wholesaler owes us, which could negatively impact our results of operations. We expect that consolidation and integration of pharmacy chains, wholesalers and pharmacy benefit managers will increase competitive and pricing pressures on pharmaceutical manufacturers, including us.Third-party royalties represent a significant percentage of our pretax income and operating cash flow.We have entered into several arrangements which entitle us to potential royalties from third parties for out-licensed intellectual property, commercialization rights and sales-based contingent proceeds related to the divestiture of businesses. In many of these arrangements we have minimal, if any, continuing involvement that contributes to the financial success of those activities. Royalties have continued to represent a significant percentage of our pretax income, including royalties related to out-licensed intellectual property and the Merck patent infringement settlement. Pretax income generated from royalties was approximately $2.7 billion in 2025. Our pretax income could be adversely affected as the royalty streams decline in future periods. For example, (i) royalties related to Keytruda* are expected to terminate on December 31, 2026, (ii) royalties related to Tecentriq* are expected to terminate on December 31, 2026, and (iii) royalties related to the divestiture of our diabetes business terminated on December 31, 2025.Failure to execute our business strategy or to identify and effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio actions could adversely impact our growth and profitability and our future results. In addition, any businesses or assets that we acquire in the future may underperform, we may not be able to successfully integrate them into our existing business and the occurrence of a number of unexpected factors could prevent or substantially delay the consummation of an anticipated acquisition, divestiture or merger.Our strategy is focused on delivering innovative, transformational medicines to patients in a focused set of disease areas. To support future revenue growth and maintain an adequate pipeline, we have acquired, or in-licensed, a number of assets, and we expect to continue to support our pipeline with compounds or products obtained through licensing and acquisitions. Competition among pharmaceutical companies for acquisition and product licensing opportunities is intense, and we may not be able to locate suitable acquisition targets or licensing partners at reasonable prices, or successfully execute such transactions. If we are unable to consistently maintain an adequate pipeline, whether through internal R&D programs or transactions with third parties or if we are unable to support and grow our marketed products, successfully execute the launches of newly approved products, advance our late-stage pipeline, manage change from our operating model evolution or manage our costs effectively, our operating results and financial condition could be negatively impacted.Additionally, future revenues, profits and cash flows of an acquired company’s products, technologies and pipeline candidates may not materialize due to low product uptake, delayed or missed pipeline opportunities, the inability to capture expected synergies resulting from cost savings and avoidance, increased competition, safety concerns, regulatory issues, supply chain problems or other factors beyond our control. Substantial difficulties, costs and delays could result from integrating our acquisitions, including for: (i) R&D, manufacturing, distribution, sales, marketing, promotion and information technology activities; (ii) policies, procedures, processes, controls and compliance; and (iii) tax considerations.
Where we acquire debt or equity securities as all or part of the consideration for business development activities, such as in connection with a joint venture or acquisition, the value of those securities will fluctuate and may depreciate in value. We may not control the company in which we acquire securities, such as in connection with a collaborative arrangement, and as a result, we will have limited ability to determine its management, operational decisions, internal controls and compliance and other policies, which can result in additional financial and reputational risks.We may not be successful in separating underperforming or non-strategic assets, and gains or losses on the divestiture of, or lost operating income from, such assets may affect our earnings. Our divestitures also may result in continued financial exposure to the divested businesses, such as through guarantees or other financial arrangements, continued supply and services arrangements, or potential litigation, following the transaction. Under these arrangements, nonperformance by us could result in obligations being
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imposed on us that could have a material adverse effect on our competitive position, cash flows, results of operations, financial condition or reputation.We might also incur asset impairment charges related to acquisitions or divestitures that reduce our earnings. The value allocated to certain of our assets could be substantially impaired due to a number of factors beyond our control. New or revised accounting standards, rules and interpretations could result in changes to the recognition of income and expense that may materially and adversely affect our financial results.If the execution or implementation of acquisitions, divestitures, alliances, joint ventures and other portfolio actions is not successful, it could adversely impact our financial condition, cash flows and results of operations. Moreover, due to the substantial amount of debt that we incurred to finance the cash portion of certain of our acquisitions, including most recently the Mirati, Karuna and RayzeBio acquisitions, there can be no assurance of when we will be able to expand our business development capacity. Although we have recently taken measures to reduce our debt, pursuing strategic transaction opportunities in the future may require us to obtain additional equity or debt financing, and could result in increased leverage and/or a downgrade of our credit ratings.
Failure to attract and retain a highly qualified workforce or to maintain our workplace culture could affect our ability to successfully develop and commercialize products.
Our success and execution of our strategy is largely dependent on our continued ability to (i) attract and retain highly qualified scientific, technical and management workforce, including people with expertise in clinical R&D, governmental regulation and commercialization, and (ii) maintain our workplace culture and employee morale. We face competition for a limited pool of qualified individuals from numerous pharmaceutical and biotechnology companies, universities, government entities, research institutions, companies seeking to enter the healthcare space, and companies in other industries. Additionally, we periodically adjust our personnel needs in response to changing macroeconomic conditions, market opportunities, management changes, acquisitions, cost levels and other internal and external considerations, which may adversely impact our workplace culture and ability to retain and incentivize employees. We cannot be sure that we will be able to attract and retain quality talent or that the costs of doing so will not materially increase.Market, Liquidity and Credit Risks
We have significant indebtedness that could have negative consequences .Certain of our acquisitions, including most recently the Mirati, Karuna and RayzeBio acquisitions, increased the amount of our debt resulting in additional interest expense, and we may incur more debt to finance future acquisitions. Although we have recently taken measures to reduce our debt, this could reduce our financial flexibility to continue capital investments, develop new products and declare future dividends. For example, following the December 2023 announcements of previous acquisitions, Standard & Poor’s downgraded BMS’s long term-credit rating from A+ to A (with a stable long-term credit outlook).Adverse changes in U.S. and global economic and political conditions could adversely affect our operations and profitability.Global economic and political risks pose significant challenges to a company’s growth and profitability and are difficult to mitigate. We generated approximately 31% of our revenues outside of the U.S. in 2025. As such, a global economic downturn could create or amplify a variety of risks to our business and could negatively affect our growth. In addition, uncertainty in the credit and capital markets could impact our growth strategy. Our revenues, earnings and cash flow are also exposed to risk from a strengthening U.S. dollar and global inflation, including in the U.S. If our operating costs were to significantly increase, whether as a result of rising inflation rates, wage increases or other factors, it could adversely affect our revenues and profitability. We also have exposure to customer credit risks in Europe, South America and other markets including from government-guaranteed hospital receivables in markets where payments are not received on time. We have significant operations in Europe, including for manufacturing and distribution. The results of our operations could be negatively impacted by any member country exiting the eurozone monetary union or EU.
Additionally, our business and operations may be adversely affected by political volatility, conflicts or crises in individual countries or regions, including terrorist activities or war and pandemics or epidemics. The COVID-19 pandemic affected demand for some of our products driven by lower patient starts and visits, and we would expect any future pandemics to have a similar effect. In addition, while we did not experience any significant manufacturing or supply issues due to COVID-19, it is possible that we could experience these issues in response to future pandemics. For instance, we may experience scarcity of certain raw materials and components as a result of the influx of pandemic related vaccine orders receiving priority treatment from vendors. Furthermore, a future epidemic or pandemic could create material staffing shortages at our manufacturing sites which could disrupt the supply of our products. It is also possible that we may experience supply chain interruptions as a result of quarantines, shelter-in-place and other governmental orders and policies, travel restrictions, airline and cargo capacity and route reductions. We may also experience delays in the initiation and enrollment of patients in our clinical trials as a consequence of any future pandemic. We may not be able to fully mitigate these delays, which could negatively impact the timing of our pipeline development programs and expected future revenues and/or cash flows. A prolonged clinical trial delay could potentially have a significant negative effect on our business, particularly if new
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competitive products enter the market or clinical trial results for our competitors’ products affect the value proposition for our product. Any such delays or difficulties in clinical development could also potentially lead to a material impairment of our intangible assets, including the $19.1 billion of other intangible assets as of December 31, 2025.
We cannot predict or reasonably estimate the impact of any potential long-term changes to the healthcare industry from global economic and political events, including any future pandemics. It is possible that changes in the healthcare system could impose additional burdens on clinical trials, which could increase the costs of sponsoring clinical trials or lead to additional delays or difficulties with completing clinical trials. We may also experience additional pricing pressures, shifts in the U.S. payer channel mix and/or increased governmental regulation.
Global economic conditions or events such as wars or pandemics also create additional risks from their impact on our suppliers, vendors, outsourcing partners, alliance partners and other third parties that we rely on to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, selling, human resource, finance, IT and other business unit and functional services. For example, if any of our third-party providers suffer from limited solvency because of global economic conditions, it could negatively impact our operating model and our business. Similarly, global events such as the Ukraine-Russia conflict, tensions between the U.S. and China and other geopolitical events and conflicts can increase the volatility of the financial markets, foreign currency exchanges and interest rates. We could also face other potential negative consequences stemming from future pandemics or global events, including but not limited to increased cyber threats to us and our partners such as cyber attacks and outages, and challenges related to the safety of our employees and safe occupancy. It is possible that global economic and political events, including changes to the geopolitical relationship between the U.S. and China, other geopolitical events and conflicts, and any future pandemic, could exacerbate any of the other risks described in this 2025 Form 10-K as well.There can be no guarantee that we will pay dividends or repurchase stock.The declaration, amount and timing of any dividends fall within the discretion of our Board. The Board’s decision will depend on many factors, including our financial condition, earnings, capital requirements, debt service obligations, industry practice, legal requirements, regulatory constraints and other factors that our Board may deem relevant. A reduction or elimination of our dividend payments or dividend program could adversely affect our stock price. In addition, we could, at any time, decide not to buy back any more shares in the market, or reduce the number of shares repurchased under our share repurchase program, which could also adversely affect our stock price.Our amended bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain lawsuits between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum that it finds favorable for such lawsuits and make it more costly for our stockholders to bring such lawsuits, which may have the effect of discouraging such lawsuits.
Our amended bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, creditors or other constituents, (iii) action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our amended and restated certificate of incorporation or our amended bylaws or (iv) action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding will be another state or federal court of the State of Delaware. Our bylaws also provide that any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and consented to this forum selection provision.
The Court of Chancery of the State of Delaware (or if the Court of Chancery does not have jurisdiction, another state or federal court of the State of Delaware) will have the fullest authority allowed by law to issue an anti-suit injunction to enforce this forum selection clause and to preclude suit in any other forum. However, this forum selection provision is not intended to apply to any actions brought under the Securities Act of 1933 (the "Securities Act"), as amended, or the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, the forum selection provision in our amended bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.Nevertheless, this forum selection provision in our bylaws may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers and other employees, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. In addition, stockholders who do bring a claim in the Court of Chancery in the State of Delaware could
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face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. While we believe the risk of a court declining to enforce the forum selection provision contained in our amended bylaws is low, if a court were to find the provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Item 7 · Management's Discussion & Analysis
+435 paragraphs −378 paragraphs ~378 changed
FY 2023-12-31 (earlier)
Item 7. 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 notes included elsewhere in this 2023 Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows.
The comparison of 2022 to 2021 results has been omitted from this Form 10-K and is incorporated by reference from our Form 10-K for the year ended December 31, 2022 “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” filed on February 14, 2023.EXECUTIVE SUMMARYBristol-Myers Squibb Company is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. Refer to the Summary of Abbreviated Terms at the end of this 2023 Form 10-K for definitions of capitalized terms used throughout the document.
In 2023, we received approvals for initial and additional indications for the following marketed products in major markets (the U.S., EU and Japan), which further expanded our geographical reach in immunology, hematology, oncology, and cardiovascular diseases: (i) U.S. and EU approval of Opdivo for treatment of completely resected stage IIB and IIC melanoma, expanding upon the existing adjuvant treatment for melanoma patients; (ii) FDA approval of Reblozyl in the first-line setting for the treatment of anemia without previous erythropoiesis stimulating agent use in adult patients with very low- to intermediate-risk MDS who may also require red blood cell transfusions, regardless of ring sideroblast status; and EU approval for an additional indication for anemia associated with non-transfusion-dependent beta thalassemia; (iii) approvals in Japan and in the EU of Opdivo in combination with chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC; (iv) approval of Camzyos for the treatment of symptomatic obstructive HCM in the EU; (v) approval of Breyanzi for the second-line treatment of diffuse large B-cell lymphoma in the EU; (vi) approval for Sotyktu for moderate-to-severe plaque psoriasis in the EU; and (vii) approval of Augtyro (repotrectinib), a next-generation tyrosine kinase inhibitor (TKI), for the treatment of adult patients with locally advanced or metastatic ROS1+ non-small cell lung cancer (NSCLC) in the U.S. We continue expanding our commercial CAR-T manufacturing network through the FDA approval of our Devens, MA facility in June 2023.
In January 2024, we acquired Mirati, a commercial stage targeted oncology company with a pipeline of commercial, clinical and pre-clinical stage oncology medicines and assets. With the Mirati acquisition, we obtained rights to Krazati *, a best-in-class inhibitor of KRASG12C mutation, approved by the FDA as a second-line treatment for patients with NSCLC; and MRTX1719, a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase I development, among others. In addition, during the fourth quarter of 2023, we entered into definitive merger agreements to acquire Karuna and RayzeBio and also entered into strategic collaboration with SystImmune. Karuna is a biopharmaceutical company driven to discover, develop and deliver transformative medicines for people living with psychiatric and neurological conditions. RayzeBio is a clinical-stage radiopharmaceutical therapeutics company with an innovation-leading position in actinium-based radiopharmaceutical therapeutics and a pipeline of potentially first-in-class and best-in-class drug development programs. Refer to “Item 8. Financial Statements and Supplementary Data—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for additional information. The goal of the collaboration with SystImmune is to co-develop and co-commercialize BL-B01D1, a bispecific topoisomerase inhibitor-based anti-body drug conjugate which targets both EGFR and HER3 and is currently being evaluated in a Phase I clinical trial for metastatic or unresectable NSCLC. Refer to “Item 8. Financial Statements and Supplementary Data—Note 3. Alliances” for further information.
The Company has the potential to increase its registrational portfolio from six to up to twelve potentially first-in-class/best-in-class assets. In addition to its growing registrational portfolio, the Company has more than 25 indication expansion opportunities on the horizon. Taken together, this leads to increased depth across the Company’s therapeutic areas, including oncology, hematology, immunology, cardiovascular and a growing presence in neuroscience.Financial Highlights
Year Ended December 31,Dollars in millions, except per share data 2023 2022
Total Revenues $ 45,006 $ 46,159
Diluted Earnings Per Share
GAAP $ 3.86 $ 2.95
Non-GAAP 7.51 7.70
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In 2023, our revenues decreased by 2%, primarily due to lower Revlimid sales driven by the previously disclosed generic erosion and increase in patients receiving free drug product for Revlimid , and to a lesser extent, Pomalyst , from the Bristol Myers Squibb Patient Assistance Foundation, partially offset by higher sales of our New Product Portfolio and In-Line Products (primarily Opdivo ). The $0.91 increase in GAAP EPS in 2023 was primarily driven by the impact of certain specified items, including deferred income tax benefit related to a non-U.S. tax ruling, lower losses on equity investments, amortization of intangible assets, as well as litigation and other settlement income, partially offset by lower revenues and product mix. After adjusting for specified items, non-GAAP EPS decreased $0.19 primarily as a result of lower revenues and product mix, partially offset by higher royalty and interest income and lower weighted average shares outstanding.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 a detailed listing of all specified items and further information, reconciliations and changes to our non-GAAP financial measures refer to “—Non-GAAP Financial Measures.”
Economic and Market Factors
Governmental ActionsOur 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. For example, on August 16, 2022, President Biden signed the IRA into law which provides for (i) the government to negotiate prices for select high-cost Medicare Part D (beginning in 2026) and Part B drugs (beginning in 2028) 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 beginning in 2022 for Part D and 2023 for Part B, and (iii) Medicare Part D redesign which replaces the current Part D CGDP and establishes a $2,000 cap for out-of-pocket limits 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, the U.S. Department of Health and Human Services selected Eliquis as one of the first 10 medicines subject to government-set prices beginning in 2026. 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. A comment period on the proposal ran through February 6, 2024, and we are not able to 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, such as those relating to the calculation of best price as well as potential executive orders focused on drug pricing are still being debated. The effect of reducing prices and reimbursement for certain of our products would significantly impact our business and consolidated results of operations.
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 legislation 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 expected to make changes to their tax laws and updates to international tax treaties 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”, “—We could lose market exclusivity of a product earlier than expected” and “—Changes to tax regulations could negatively impact our earnings.”
Significant Product Approvals
The following is a summary of the significant approvals received in 2023:Product Date ApprovalAugtyro(repotrectinib)
November 2023 FDA approval of Augtyro for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC.
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Opdivo October 2023 FDA approval of Opdivo for the adjuvant treatment of adult and pediatric patients 12 years and older with completely resected stage IIB or IIC melanoma.
Reblozyl August 2023 FDA approval of Reblozyl for the treatment of anemia without previous erythropoiesis stimulating agent use (ESA-naïve) in adult patients with very low- to intermediate-risk MDS.
Opdivo August 2023 EC approval of Opdivo as a monotherapy for the adjuvant treatment of adults and adolescents 12 years of age and older with stage IIB or IIC melanoma who have undergone complete resection.
Opdivo June 2023 EC approval of Opdivo in combination with platinum-based chemotherapy for the neoadjuvant treatment of resectable NSCLC at a high risk of recurrence in adult patients with tumor cell PD-L1 expression > 1%.
Camzyos June 2023 EC approval of Camzyos for the treatment of symptomatic (New York Heart Association, class II-III) obstructive HCM.
Breyanzi May 2023 EC approval of Breyanzi for the treatment of adult patients with diffuse large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and FL grade 3B, who relapsed within 12 months from completion of, or are refractory to, first-line chemoimmunotherapy.
Opdivo March 2023 Japan's Ministry of Health, Labour and Welfare approval of Opdivo plus chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC.
Sotyktu March 2023 EC approval of Sotyktu for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy.
Reblozyl March 2023 EC approval of Reblozyl for the treatment in adult patients of anemia associated with non-transfusion-dependent beta thalassemia.
Refer to “—Product and Pipeline Developments” for all of the developments in our marketed products and late-stage pipeline in 2023 and in early 2024.
40StrategyOur 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. As we undergo a period of renewal, our strategy will be focused on driving near-term growth, minimizing the impact of a transition period that follows and delivering growth in the late 2020s by accelerating opportunities that enhance productivity and efficiency, advance our pipeline, and drive strong commercial execution that move our business forward. We remain committed to a strategic business development and maintaining a strong investment grade credit rating, growing the dividend and reducing additional debt that will be issued in support of recent transactions.
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 priorities in strengthening presence in dermatology, rheumatology and gastrointestinal disorders, establishing new standards of care in pulmonology and rapidly advance 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 towards expanding our pipeline of registrational assets from six to up to twelve. In addition, we are positioned to support continued innovation and expand treatment options across several different diseases based on our differentiated research platforms. We have a broad portfolio and pipeline when it comes to autologous CAR-T cell therapies. We have two approved cell therapies against two distinct targets and are continuing to build our leadership in this space. We are expanding manufacturing capacity, exploring innovative technologies such as dual-targeting CAR-Ts and allogenic approaches, advancing multiple next-generation assets including new targets and rapidly expanding into immunology, including lupus and multiple sclerosis. We also have a strong position in the protein degradation field and have been advancing our pipeline with an expansive library of assets with two in registrational trials, an additional five in clinical phase studies and more than fifteen being studied pre-clinically. This growing platform has potential across several diseases and is positioned to deliver approximately four INDs each year. Together with our proven track record, rapidly advancing pipeline and growth with marketed products, we increased and sustained our R&D productivity enabling us to identify more high-quality candidates and increase their probability of reaching patients in need. Specifically, our ambition is to: (i) deliver approximately ten INDs per year; (ii) increase success rates from first-in-human trials to approval to approximately 20%; (iii) reduce timelines to achieve a median of 6.5 years from first-in-human trials to approval. Our R&D strategy will help ensure we maintain a strong legacy of scientific innovation, bringing first-in class and/or best-in-class treatments to patients at an accelerated speed.
Our commercial model has been successful with revenues from our in-line brands and new product portfolio continuing to grow, which demonstrates strong execution of our strategy. We remain focused and well-resourced in our cancer development programs and seek to broaden the use of Opdivo in earlier lines of therapy, expand into new tumors, accelerate next wave oncology mechanisms and develop treatment options for refractory oncology patients. We are encouraged that our investigational subcutaneous formulation for Opdivo has the potential to bring enhanced benefits to patients into the next decade, with positive registrational data now in-house. We continue to drive adoption of Opdivo by expanding into additional indications and tumor types both as a monotherapy and in combination with Yervoy and other anti-cancer agents. We are further strengthening our IO portfolio with Opdualag for the treatment of melanoma and potential expanded opportunities in other indications. We are growing a differentiated NSCLC portfolio, which includes the launch of Augtyro and includes Krazati , (acquired through Mirati), which demonstrates a strategic fit into our oncology portfolio. We are also strengthening our neuroscience portfolio with the planned acquisition of Karuna. Moreover, Eliquis continues to grow, leveraging its best in class clinical profile and extensive real world data and remains the number one novel oral anticoagulant in total prescriptions globally. Camzyos continues to demonstrate benefits as shared through our long-term follow-up data from two Phase III studies. In immunology, Sotyktu is the key growth driver for BMS and we continue to make further investments to accelerate the launch through direct to consumer advertising and adding field force support. In addition, our Phase III registrational clinical trials are underway for Sotyktu in PsA, SLE and Sjögren's Syndrome. We are able to leverage our leading capabilities in hematological malignancies and our robust pipeline to provide opportunities for long-term growth to offset the impact of current and future patent expiries for Revlimid and Pomalyst . As we look at our cell therapy franchise, we continue to explore new indications with Breyanzi to include the treatment of CLL, FL and MCL. If indication for CLL is approved, it would be the first and only CAR-T available for this patient population. Reblozyl is advancing into new indications with an ongoing registrational trial for chronic anemia associated with myelofibrosis.
The evolution in our operating model, which focuses on maintaining a disciplined approach in marketing, selling and administrative expenses, will enable us to deliver the necessary strategic, financial and operational flexibility to invest in the highest priority opportunities within our portfolio.
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Our strategy extends well beyond the discovery, development and delivery of transformative medicines that help patients prevail over serious diseases. We understand the future of our employees, our communities, our planet, and our business are inextricably linked. Through our Environmental, Social and Governance (ESG) strategy, we seek to mobilize our capabilities and resources to positively impact the communities where we live, work, and serve around the world. As we work to transform patients’ lives through science, we operate with effective governance, uncompromising quality and compliance, and the highest ethical standards to deliver our mission. These values have been central to who we are, what we do, and how we do it since our company was founded in 1887. We believe that driving long-term business value is at the heart of living our purpose, enabling us to be leaders and difference-makers for generations to come.Acquisitions, Divestitures, Licensing and Other ArrangementsFor detailed information on significant acquisitions, divestitures, collaborations, licensing and other arrangements during 2023 refer to “Item 8. Financial Statements and Supplementary Data —Note 3. Alliances” and “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements.”
42RESULTS OF OPERATIONS
Regional Revenues
The composition of the changes in revenues was as follows:
Year Ended December 31,Dollars in millions 2023 2022 % Change Foreign Exchange (b)
United States $ 31,555 $ 31,828 (1) % N/A
International 12,752 13,497 (6) % (1) %
Other (a)
699 834 (16) % N/A
Total $ 45,006 $ 46,159 (2) % — %
(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 revenues.
United States• U.S. revenues in 2023 decreased 1% primarily due to lower Revlimid sales driven by the previously disclosed generic erosion and an increase in patients receiving free drug product for Revlimid , and to a lesser extent, Pomalyst , from the Bristol Myers Squibb Patient Assistance Foundation, a separate and independent 501(c)(3) entity to which BMS donates product , partially offset by an increase in demand for our In-Line Products and New Product Portfolio. Average net selling prices remained flat in 2023 compared to 2022.International• International revenues in 2023 decreased 6% primarily due to Revlimid and Eliquis generic erosion, lower average net selling prices, and foreign exchange impacts, partially offset by an increase in demand for Opdivo and New Product Portfolio.
No single country outside the U.S. contributed more than 10% of total revenues in 2023 and 2022. Our business is typically not seasonal.GTN Adjustments
We recognize revenue net of GTN adjustments that are further described in “—Critical Accounting Policies.”
The activities and ending reserve balances for each significant category of GTN adjustments were as follows:
Dollars in millions Charge-Backs and Cash Discounts Medicaid and Medicare Rebates Other Rebates, Returns, Discounts and Adjustments TotalBalance at January 1, 2023 $ 675 $ 3,822 $ 2,880 $ 7,377Provision related to sales made in:Current period 9,155 13,400 7,480 30,035
Prior period (11) 11 (134) (134)
Payments and returns (9,172) (12,788) (7,065) (29,025)
Foreign currency translation and other (1) — 76 75
Balance at December 31, 2023 $ 646 $ 4,445 $ 3,237 $ 8,328
43The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as follows:Year Ended December 31, % Change
Dollars in millions 2023 2022 2023 vs. 2022
Gross product sales $ 73,679 $ 69,633 6 %GTN AdjustmentsCharge-backs and cash discounts (9,144) (7,469) 22 %
Medicaid and Medicare rebates (13,411) (11,362) 18 %
Other rebates, returns, discounts and adjustments (7,346) (6,131) 20 %
Total GTN Adjustments (29,901) (24,962) 20 %
Net product sales $ 43,778 $ 44,671 (2) %
GTN adjustments percentage 40 % 36 % 4 %
U.S. 46 % 41 % 5 %
Non-U.S. 19 % 17 % 2 %
Reductions to provisions for product sales made in prior periods resulting from changes in estimates were $134 million for 2023 and $229 million for 2022, respectively. The reductions to provisions in 2022 driven by the non-U.S. revisions in clawback amounts driven by the VAT recoverable estimates. 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 higher government channel mix, which has higher GTN adjustment percentages. Non-U.S. GTN adjustments percentage increased primarily due to continued pricing pressures.
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Product RevenuesYear Ended December 31,Dollars in millions 2023 2022 % Change
In-Line Products
Eliquis 12,206 $ 11,789 4 %
U.S. 8,592 7,786 10 %
Non-U.S. 3,614 4,003 (10) %
Opdivo 9,009 8,249 9 %
U.S. 5,283 4,812 10 %
Non-U.S. 3,726 3,437 8 %
Orencia 3,601 3,464 4 %
U.S. 2,754 2,638 4 %
Non-U.S. 847 826 3 %
Pomalyst/Imnovid 3,441 3,497 (2) %
U.S. 2,357 2,438 (3) %
Non-U.S. 1,084 1,059 2 %
Yervoy 2,238 2,131 5 %
U.S. 1,388 1,304 6 %
Non-U.S. 850 827 3 %
Sprycel 1,930 2,165 (11) %
U.S. 1,446 1,497 (3) %
Non-U.S. 484 668 (28) %
Mature and other products 1,895 2,045 (7) %
U.S. 772 750 3 %
Non-U.S. 1,123 1,295 (13) %
Total In-Line Products 34,320 33,340 3 %
U.S. 22,592 21,225 6 %
Non-U.S. 11,728 12,115 (3) %
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Year Ended December 31,
Dollars in millions 2023 2022 % Change
New Product Portfolio
Reblozyl 1,008 717 41 %
U.S. 811 591 37 %
Non-U.S. 197 126 56 %
Opdualag 627 252 *
U.S. 617 252 *
Non-U.S. 10 — N/A
Abecma 472 388 22 %
U.S. 358 297 21 %
Non-U.S. 114 91 25 %
Zeposia 434 250 74 %
U.S. 324 177 83 %
Non-U.S. 110 73 51 %
Breyanzi 364 182 100 %
U.S. 303 151 *
Non-U.S. 61 31 97 %
Camzyos 231 24 *
U.S. 226 24 *
Non-U.S. 5 — N/A
Sotyktu 170 8 *
U.S. 157 8 *
Non-U.S. 13 — N/A
Onureg 168 124 35 %
U.S. 117 95 23 %
Non-U.S. 51 29 76 %
Inrebic 110 85 29 %
U.S. 74 69 7 %
Non-U.S. 36 16 *
Augtyro 1 — N/A
U.S. 1 — N/ANon-U.S. — — N/ATotal New Product Portfolio 3,585 2,030 77 %
U.S. 2,988 1,664 80 %
Non-U.S. 597 366 63 %
Total In-Line Products and New Product Portfolio 37,905 35,370 7 %
U.S. 25,580 22,889 12 %
Non-U.S. 12,325 12,481 (1) %
46Year Ended December 31,Dollars in millions 2023 2022 % Change
Recent LOE Products (a)
Revlimid 6,097 9,978 (39) %
U.S. 5,266 8,359 (37) %
Non-U.S. 831 1,619 (49) %
Abraxane 1,004 811 24 %
U.S. 709 580 22 %
Non-U.S. 295 231 28 %
Total Recent LOE Products 7,101 10,789 (34) %
U.S. 5,975 8,939 (33) %
Non-U.S. 1,126 1,850 (39) %
Total Revenues 45,006 46,159 (2) %
U.S. 31,555 31,828 (1) %
Non-U.S. 13,451 14,331 (6) %
* Change in excess of 100%.
(a) Recent LOE Products include products with significant expected decline in revenue from a prior reporting period as a result of a LOE.
47
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% in 2023 primarily due to higher demand.
• International revenues decreased 10% in 2023 primarily due to lower average net selling prices and generic erosion in the UK and Canada. Excluding foreign exchange impacts, revenues decreased by 10%.
• Following the May 2021 expiration of regulatory exclusivity for Eliquis in Europe and the court decision in the UK finding the UK apixaban composition-of-matter patent and related SPC invalid, generic manufacturers have begun marketing generic versions of Eliquis in the UK and in Portugal, and may seek to market generic versions of Eliquis in additional countries in Europe, prior to the expiration of our patents, which has led to additional infringement and invalidity actions involving our Eliquis patents being filed in various countries in Europe. Most recently, in France, Norway and Sweden, courts held in BMS's favor, confirming the validity of the composition of matter patent and related SPCs in those countries. 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 20. Legal Proceedings and Contingencies—Intellectual Property” for further information.
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 10% in 2023 due to higher demand across multiple indications and to a lesser extent higher average net selling prices. The higher demand was related to the following indications: the Opdivo+Yervoy combinations for NSCLC, various gastric, esophageal and bladder cancers.
• International revenues increased 8% in 2023 primarily due to higher demand as a result of core indications and additional indication launches partially offset by foreign exchange impact of 3%. Excluding foreign exchange impacts, revenues increased by 11%.
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 4% in 2023 primarily due to higher demand.
• International revenues increased 3% in 2023 due to higher demand partially offset by foreign exchange impact of 3%. Excluding foreign exchange impacts, revenues increased by 6%.• BMS is not aware of any Orencia biosimilars on the market in the U.S., EU or Japan. Formulation and additional patents expire in 2026 and beyond.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 decreased 3% in 2023 due to an increase in the number 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, partially offset by higher average net selling prices.
• International revenues increased 2% in 2023 due to higher demand, partially offset by lower average net selling prices and foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased by 3%.
• In the EU, the estimated minimum market exclusivity date is August 2024.
48
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 6% in 2023 due to higher average net selling prices and demand.
• International revenues increased 3% in 2023 due to higher demand as a result of additional indication launches and core indications, partially offset by lower average net selling prices and foreign exchange impacts of 2%. Excluding foreign exchange impacts, revenues increased by 5%.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 decreased 3% in 2023 due to lower average net selling prices driven by unfavorable GTN adjustments.
• International revenues decreased 28% in 2023 due to lower demand as a result of generic erosion, lower average net selling price and foreign exchange impact of 3%. Excluding foreign exchange impact, revenues decreased by 25%.
• 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 has been extended to 2024 for the treatment of non-imatinib-resistant CML, but generics have been approved for other indications.
Mature and other products — includes all other products, including those which have lost exclusivity in major markets, OTC products and royalty revenue and mature products.
• International revenues for mature and other products decreased 13% primarily due to lower demand as a result of continued generic erosion and foreign exchange impacts of 2%. Excluding foreign exchange impacts, revenues decreased by 11%.
Reblozyl (luspatercept-aamt) — an erythroid maturation agent indicated for the treatment of anemia in i) adult patients with transfusion dependent and non-transfusion dependent beta thalassemia who require regular red blood cell transfusions, ii) adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require red blood cell transfusions, as well as iii) adult patients without previous erythropoiesis stimulating agent use (ESA-naïve) with very low- to intermediate-risk MDS who may require regular red blood cell transfusions, regardless of ring sideroblast status.
• U.S. revenues increased 37% in 2023 primarily due to higher demand.
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. Opdualag was launched in March 2022.
Abecma (idecabtagene vicleucel) — is a BCMA genetically modified autologous CAR–T cell therapy indicated for the treatment of adult patients with relapsed or refractory multiple myeloma after four 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 increased 21% in 2023 primarily due to higher demand enabled by additional manufacturing capacity.
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 83% in 2023 primarily due to higher demand.
49
Breyanzi (lisocabtagene maraleucel) — a CD19-directed genetically modified autologous CAR-T cell therapy indicated for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after one or more lines of systemic therapy, including diffuse large B-cell lymphoma not otherwise specified, high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma, and FL grade 3B.
• U.S. revenues doubled in sales primarily due to higher demand.
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.
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.
Onureg (azacitidine) — an oral hypomethylating agent that incorporates into DNA and RNA, indicated for continued treatment of adult patients with AML who achieved first complete remission or complete remission with incomplete blood count recovery following intensive induction chemotherapy and are not able to complete intensive curative therapy.
• U.S. revenues increased 23% in 2023 primarily due to higher demand.
Inrebic (fedratinib) — an oral kinase inhibitor indicated for the treatment of adult patients with intermediate-2 or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) MF.
• U.S. revenues increased 7% in 2023 primarily due to higher demand.
Augtyro (repotrectinib) — a kinase inhibitor indicated for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC. Augtyro was launched in December 2023.
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 37% in 2023 primarily due to generic erosion and an increase in the number 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, and to a lesser extent lower average net selling prices.
• International revenues decreased 49% in 2023 primarily due to generic erosion across several European countries and foreign exchange impacts of 2%. Excluding foreign exchange impacts, revenues decreased by 47%.
• In the U.S., certain third parties have been 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. Global revenues for Revlimid are expected to decline in the range of approximately $1.5 billion to $2.0 billion in 2024.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 increased 22% in 2023 primarily due to higher branded sales resulting from lower authorized generic sales.
50Estimated End-User DemandPursuant to the SEC Consent Order described under “—SEC Consent Order”, 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 December 31, 2023, for our U.S. distribution channels, and September 30, 2023, 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 account for approximately 85% of total gross sales of U.S. products for the year ended December 31, 2023. 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 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 for the year ended December 31, 2023 is not available prior to the filing of this 2023 Form 10-K. 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.
51Expenses
Year Ended December 31,Dollar in Millions 2023 2022 % ChangeCost of products sold (a)$ 10,693 $ 10,137 5 %
Marketing, selling and administrative 7,772 7,814 (1) %
Research and development 9,299 9,509 (2) %
Acquired IPRD 913 815 12 %
Amortization of acquired intangible assets 9,047 9,595 (6) %
Other (income)/expense, net (1,158) 576 *
Total Expenses $ 36,566 $ 38,446 (5) %
* Change in excess of 100%.(a) Excludes amortization of acquired intangible assets.
Cost of products soldCost of products sold include material, internal labor and overhead costs from our owned manufacturing sites, third-party product supply costs and other supply chain costs managed by our global manufacturing and supply organization. Cost of products sold also includes royalties and profit sharing, foreign currency hedge settlement gains and losses and impairment charges, as well as proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, employee stock compensation costs and other appropriate costs. Cost of products sold excludes amortization from acquired intangible assets.
Cost of products sold increased by $556 million or 5% primarily due to higher inventory costs ($388 million), driven by product mix and CAR-T cell therapy costs, higher royalties and profit sharing ($381 million), lower hedging settlement gains ($189 million), partially offset by the elimination of the Puerto Rico excise tax ($210 million) and lower inventory purchase price adjustments ($209 million).
Marketing, selling and administrative
Marketing, selling and administrative expenses primarily include salary and benefit costs, third-party professional and marketing fees, outsourcing fees, shipping and handling costs, advertising and product promotion costs, as well as proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, employee stock compensation costs and other appropriate costs. Expenses are managed through regional commercialization organizations or global enabling functions such as finance, legal, information technology and human resources. Certain expenses are shared with alliance partners based upon contractual agreements.
Marketing, selling and administrative expenses decreased by $42 million or 1% primarily due to the timing of charitable giving ($215 million) and cash settlement of Turning Point unvested stock awards ($73 million) in 2022, partially offset by higher advertising and promotion costs resulting from additional new product launches ($121 million) and site exit costs ($88 million).Research and developmentResearch and development activities include research and early discovery, preclinical and clinical development, drug formulation and medical support of marketed products. Expenses include salary and benefit costs, third-party grants and fees paid to clinical research organizations, supplies, IPRD impairment charges and proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, employee stock compensation costs and other appropriate costs. Certain expenses are shared with alliance partners based upon contractual agreements.
Research and development expense decreased by $210 million or 2% primarily due to costs related to the unwinding of inventory purchase price adjustments for clinical use ($130 million) and cash settlement of Turning Point unvested stock awards ($80 million) in 2022, partially offset by the purchase of a priority review voucher ($95 million) in 2023.Acquired IPRD
Acquired IPRD expenses are comprised of upfront payments, contingent milestone payments in connection with asset acquisitions or in-license arrangements of third-party intellectual property rights, as well as any upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval. Acquired IPRD charges are detailed in the table below.52Year Ended December 31,Dollars in millions 2023 2022
Mavacamten rights buy-out (Note 4) $ 445 $ —
Orum upfront payment (Note 4) 100 —
Mavacamten royalty extinguishment (Note 4) — 295
Dragonfly milestone and opt-in license fee — 200
Evotec designation and opt-in license fees 90 —
BridgeBio upfront collaboration fee — 90
Prothena opt-in license fee 55
Zenas upfront license fee 50 —
Immatics upfront license and opt-in fee (Note 4) 15 150
Other 158 80
Acquired IPRD $ 913 $ 815Refer to “Item 8. Financial Statements and Supplementary Data—Note 3. Alliances” and “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for additional information.
Amortization of Acquired Intangible AssetsAmortization of acquired intangible assets decreased by $548 million or 6% primarily due to Abraxane marketed product right being fully amortized in the fourth quarter of 2022.Other (income)/expense, netOther (income)/expense, net changed by $1.7 billion primarily due to litigation and other settlements, equity investments and other items discussed below.Year Ended December 31,Dollars in millions 2023 2022
Interest expense $ 1,166 $ 1,232
Royalty and licensing income (1,488) (1,283)
Royalty income - divestitures (862) (832)
Equity investment losses/(income), net 160 801
Integration expenses 242 440
Loss on debt redemption — 266
Divestiture gains — (211)
Litigation and other settlements (390) 178
Investment income (449) (171)
Provision for restructuring 365 75
Contingent consideration (8) (9)
Other 106 90
Other (income)/expense, net $ (1,158) $ 576
• Interest expense decreased in 2023 due to additional debt maturities. Refer to “Item 8. Financial Statements and Supplementary Data—Note 10. Financing Arrangements” for further information.
• Royalties increased in 2023 primarily due to higher Keytruda * royalties. Refer to “Item 8. Financial Statements and Supplementary Data—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for further information.
• Equity investments generated lower losses in 2023 compared to 2022 due to fair value adjustments for investments that have readily determinable fair value. Refer to “Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements” for more information.
• Integration expenses decreased in 2023 due to lower consulting fees to implement Celgene integration initiatives related to processes and systems.
• Loss on debt redemption resulted from the early redemption of long-term debt of $6.0 billion in 2022.
• Divestiture gains resulted from certain mature product rights divested in 2022.
• Investment income increased in 2023 primarily due to higher interest rates.
53
• Litigation and other settlements in 2023 include $384 million of income related to the AZ settlement and $400 million of income related to the Nimbus' TYK2 program change of control provision, partially offset by $322 million expense recorded in connection with the BeiGene settlement. Litigation and other settlements in 2022 include amounts related to commercial disputes regarding licensing and supply obligation matters, intellectual property and promotional practice matters. Refer to "Item 8. Financial Statements—Note 5. Other (Income)/Expense, Net."
• Provision for restructuring includes exit and other costs primarily related to certain restructuring activities including a new plan in 2023 discussed further in “Item 8. Financial Statements and Supplementary Data—Note 6. Restructuring.”Income Taxes
Year Ended December 31,Dollars in millions 2023 2022
Earnings Before Income Taxes $ 8,440 $ 7,713
Provision for Income Taxes 400 1,368
Effective Tax Rate 4.7 % 17.7 %
Impact of Specified Items 10.0 % (2.4) %
Effective Tax Rate Excluding Specified Items 14.7 % 15.3 %
The effective tax rate decreased from 17.7% to 4.7% primarily due to the impact of specified items summarized in the following “—Non-GAAP Financial Measures” section. The most significant impacts included (i) 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 2023, (ii) $123 million higher tax benefits attributed to foreign currency on net operating loss and other carryforwards in 2023, (iii) a $193 million valuation allowance reversal related to unrealized equity investment losses in 2023, (iv) a $72 million tax benefit resulting from a revaluation of the basis of intangible and other assets internally transferred to streamline our legal entity structure after the Celgene acquisition in 2022, and (v) a $225 million tax reserve release related to the 2009 Mead Johnson split-off transaction in 2022.
Excluding the impact of specified items, the effective tax rate decreased from 15.3% to 14.7% primarily due to (i) revised guidance regarding deductibility of certain research and development expenses which reduced income taxes attributable to 2023 pre-tax income by approximately $160 million and was the primary reason for a $240 million reduction to previously estimated income taxes for 2022 upon finalization of the U.S. Federal income tax return, (ii) a favorable jurisdictional earnings mix which was partially offset by (iii) a $144 million impact of changes in the Puerto Rico tax decree that eliminated a previously creditable excise tax and (iv) $208 million of lower income tax reserve reversals. Income tax reserve reversals included $89 million related to the Celgene’s 2009-2011 IRS audits in 2023 and $297 million for tax positions that were effectively settled for the BMS 2008 to 2012 tax years (excluding Mead Johnson related amounts that were specified) and the lapse of statute of limitations for the Celgene 2012 to 2016 tax years in 2022. Refer to “Item 8. Financial Statements and Supplementary Data—Note 7. Income Taxes” for additional information.
In December 2022, the EU member states voted unanimously to adopt a Directive implementing the Pillar Two (global minimum tax) rules giving member states until December 31, 2023 to implement the Directive into national legislation. Certain jurisdictions in which we operate, under the OECD/G20 Inclusive Framework, have enacted legislation that adopts a subset of such rules effective January 1, 2024, with the remaining rules becoming effective January 1, 2025. These rules and associated legislative changes may significantly impact our tax provision and results of operations. The implementation of Pillar Two is currently expected to increase our effective tax rate excluding specified items by approximately 1% in 2024.
54Non-GAAP Financial MeasuresOur 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 Therapeutics 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, release of income tax reserves related to the Mead Johnson split-off transaction and internal transfers of intangible and other assets to streamline our legal entity structure subsequent 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 February 2, 2024 and are incorporated herein by reference.
Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, 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.
55Specified items were as follows:
Year Ended December 31,Dollars in millions 2023 2022
Inventory purchase price accounting adjustments $ 84 $ 293
Intangible asset impairment 27 —
Site exit and other costs 64 63
Cost of products sold 175 356
Employee compensation charges — 73
Site exit and other costs 94 6
Marketing, selling and administrative 94 79
IPRD impairments 80 98
Priority review voucher 95 —
Inventory purchase price accounting adjustments — 130
Employee compensation charges — 80
Site exit and other costs 12 —
Research and development 187 308
Amortization of acquired intangible assets 9,047 9,595
Interest expense (a)
(52) (83)
Equity investment losses/(gains), net 152 799
Integration expenses 242 440
Loss on debt redemption — 266
Divestiture gains — (211)
Litigation and other settlements (397) 140
Provision for restructuring 365 75
Other 55 71
Other (income)/expense, net 365 1,497
Increase to pretax income 9,868 11,835
Income taxes on items above (1,639) (1,332)
Income taxes attributed to internal transfer of intangible and other assets — (72)
Income tax reserve release attributed to Mead Johnson — (225)
Income taxes attributed to non-U.S. tax ruling (656) —
Income taxes (2,295) (1,629)
Increase to net earnings $ 7,573 $ 10,206
(a) Includes amortization of purchase price adjustments to Celgene debt.
56The reconciliations from GAAP to Non-GAAP were as follows:
Year Ended December 31,Dollars in millions, except per share data 2023 2022
Net earnings attributable to BMS
GAAP $ 8,025 $ 6,327
Specified Items 7,573 10,206
Non-GAAP $ 15,598 $ 16,533
Weighted-average common shares outstanding – diluted 2,078 2,146
Diluted earnings per share attributable to BMS
GAAP $ 3.86 $ 2.95
Specified items 3.65 4.75
Non-GAAP $ 7.51 $ 7.70
57Financial Position, Liquidity and Capital Resources
Our net debt position was as follows:
December 31,Dollars in millions 2023 2022
Cash and cash equivalents $ 11,464 $ 9,123
Marketable debt securities – current 816 130
Marketable debt securities – non-current 364 —
Total cash, cash equivalents and marketable debt securities 12,644 9,253
Short-term debt obligations (3,119) (4,264)
Long-term debt (36,653) (35,056)
Net debt position $ (27,128) $ (30,067)Liquidity and Capital Resources
We regularly assess our anticipated working capital needs, debt and leverage ratio levels, debt maturities, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed, which may lead to the issuance of additional debt securities, the repurchase of debt securities prior to maturity or the issuance or repurchase of common stock.We believe that our existing cash, cash equivalents and marketable debt securities together with cash generated from operations in the next few years, and, if required, from the issuance of commercial paper, will be sufficient to satisfy our anticipated cash needs for at least the next few years, including dividends, capital expenditures, milestone payments, working capital, income taxes, restructuring initiatives, repurchase of common stock, and debt maturities of approximately $10.3 billion through 2028, as well as any debt repurchases through redemptions or tender offers. As of December 31, 2023, our net debt position decreased by $2.9 billion primarily driven by $13.9 billion of cash provided by operations partially offset by $9.9 billion of dividend payments and common stock repurchases and $1.2 billion of capital expenditures.
In February 2024, we entered into a $10.0 billion 364-day senior unsecured delayed draw term loan facility to provide bridge financing for the planned acquisitions of Karuna and RayzeBio. This facility would be drawn only if these acquisitions close prior to our planned issuance of debt securities and, if drawn, would be repaid following the issuance of such securities. No amounts were outstanding as of February 13, 2024. For more information on planned acquisitions, refer to “Item 8. Financial Statements and Supplementary Data — Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements”.
In 2023, we issued an aggregate principal amount of $4.5 billion of debt. We used the net proceeds for the acquisition of Mirati in January 2024 and general corporate purposes. In addition, $3.9 billion of debt matured and was repaid. Refer to “Item 8. Financial Statements and Supplementary Data —Note 10. Financing Arrangements” for further information.
We have a share repurchase program, authorized by our Board of Directors, allowing for repurchases of BMS common stock shares, effected in the open market or through privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, including through Rule 10b5-1 trading plans. The share repurchase program does not obligate us to repurchase any specific number of shares nor does it have a specific expiration date and may be suspended or discontinued at any time. In 2023, we repurchased approximately 87 million shares of our common stock for $5.2 billion, including approximately 70 million shares for $4.0 billion through our ASR agreements. In December 2023, the Board of Directors approved an increase of $3.0 billion to the share repurchase authorization for BMS's common stock. The remaining share repurchase capacity under the BMS share repurchase program was $5.0 billion as of December 31, 2023. Refer to “Item 8. Financial Statements and Supplementary Data—Note 17. Equity” for additional information.
Dividend payments were $4.7 billion in 2023 and $4.6 billion in 2022. Dividend paid per common share was $0.57 during each quarter of 2023. Dividends are authorized on a quarterly basis by our Board of Directors.
Under our commercial paper program, we may issue a maximum of $7.0 billion unsecured notes that have maturities of not more than 365 days from the date of issuance. There were no commercial paper borrowings outstanding as of December 31, 2023.
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As of December 31, 2023, we had a five-year $5.0 billion revolving credit facility expiring in January 2028, which is extendable annually by one year with the consent of the lenders. In January 2024, we extended the credit facility to January 2029. Additionally, in February 2024, we entered into a $2.0 billion 364-day revolving credit facility. 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. No borrowings were outstanding under any revolving credit facility as of December 31, 2023 or 2022.
Our investment portfolio includes marketable debt securities, which are subject to changes in fair value as a result of interest rate fluctuations and other market factors. Our investment policy establishes limits on the amount and time to maturity of investments with any institution. The policy also requires that investments are only entered into with corporate and financial institutions that meet high credit quality standards. Refer to “Item 8. Financial Statements and Supplementary Data—Note 10. Financing Arrangements” for further information.Capital ExpendituresAnnual capital expenditures were approximately $1.1 billion in 2023 and 2022, $970 million in 2021 and are expected to be approximately $1.4 billion in 2024 and 2025. We continue to make capital expenditures in connection with the expansion of our cell therapy and other manufacturing capabilities, research and development and other facility-related activities.Contractual Obligations and Off-Balance Sheet Arrangements
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to debt, income taxes and lease arrangements are provided in “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards”, “—Note 10. Financing Arrangements”, “—Note 7. Income Taxes” and “—Note 14. Leases”, respectively.We are committed to an aggregate $20.0 billion of potential contingent future research and development milestone payments to third parties for in-licensing, asset acquisitions and development programs including early-stage milestones of $6.5 billion (milestones achieved through Phase III clinical studies) and late-stage milestones of $13.5 billion (milestones achieved post Phase III clinical studies). Payments generally are due and payable only upon achievement of certain developmental and regulatory milestones for which the specific timing cannot be predicted. Certain agreements also provide for sales-based milestones aggregating to $14.6 billion that we would be obligated to pay upon achievement of certain sales levels in addition to royalties. We also have certain manufacturing, development and commercialization obligations in connection with alliance arrangements. It is not practicable to estimate the amount of these obligations. Refer to “Item 8. Financial Statements and Supplementary Data—Note 3. Alliances” and "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements" for further information.We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.
Credit RatingsIn December 2023, following our announcements to acquire Karuna and RayzeBio, Standard & Poor's downgraded BMS's long-term credit rating to A from A+ (with a stable long-term credit outlook). There were no changes to our short-term Standard & Poor credit rating (A1). The downgrade to long-term credit ratings reflects Standard & Poor's anticipation of a higher debt leverage following the announced acquisitions, partially offset by improvements in business strengths. In February 2024, Moody's confirmed BMS's long-term (A2) and short-term (Prime-1) ratings (with a negative long-term credit outlook).
Collectively, the current long-term credit ratings reflect the agencies’ opinion that we have a low default risk but are somewhat susceptible to adverse effects of changes in circumstances and economic conditions. The short-term credit ratings reflect the agencies’ opinion that we have good to extremely strong capacity for timely repayment. Any credit rating downgrade may affect the interest rate of any debt we may incur, the fair market value of existing debt and our ability to access the capital markets generally.
59Cash Flows
The following is a discussion of cash flow activities:
Year Ended December 31,Dollars in millions 2023 2022Cash flow provided by/(used in):Operating activities $ 13,860 $ 13,066
Investing activities (2,295) (1,062)
Financing activities (9,416) (16,962)Operating Activities
Cash flow from operating activities represents the cash receipts and disbursements from all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting net earnings for noncontrolling interest, non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash and when the transactions are recognized in our results of operations. As a result, changes in cash from operating activities reflect the timing of cash collections from customers and alliance partners; payments to suppliers, alliance partners and employees; customer discounts and rebates; and tax payments in the ordinary course of business.The $794 million increase in cash flow provided by operating activities compared to 2022 resulted from $1.1 billion of lower U.S. income tax payments, primarily due to revised guidance regarding deductibility of certain research and development expenses, and $900 million of higher non-customer collections, primarily due to royalties, interest, litigation and other settlements. These impacts were partially offset by $900 million of lower net customer collections (net of rebates and discounts) and $300 million of higher payments, primarily due to additional inventory requirements.Investing Activities
Cash requirements from investing activities include cash used for acquisitions, manufacturing and facility-related capital expenditures and purchases of marketable securities with original maturities greater than 90 days at the time of purchase, proceeds from business divestitures (including royalties), the sale and maturity of marketable securities, sale of equity investments, as well as upfront and contingent milestones payments from licensing arrangements.The $1.2 billion increase in cash flow used in investing activities compared to 2022 resulted from $3.9 billion of changes in the amount of marketable debt securities held and $396 million of lower divestiture proceeds, partially offset by the acquisition of Turning Point ($3.2 billion net of cash acquired) in 2022.Financing Activities
Cash requirements from financing activities include cash used to pay dividends, repurchase common stock and repay long-term debt and other borrowings, as well as proceeds from the exercise of stock options and issuance of long-term debt and other borrowings.The $7.5 billion decrease in cash used in financing activities compared to 2022 resulted from $5.8 billion of changes in net debt position, primarily due to the $4.5 billion issuance of debt in connection with the acquisition of Mirati and lower debt maturities of $871 million, and $2.8 billion of lower share repurchases, partially offset by $957 million of lower proceeds from stock option exercises.Recently Issued Accounting Standards
For recently issued accounting standards, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards.”
SEC Consent Order
As previously disclosed, on August 4, 2004, we entered into a final settlement with the SEC, concluding an investigation concerning certain wholesaler inventory and accounting matters. The settlement was reached through a Consent, a copy of which was attached as Exhibit 10 to our quarterly report on Form 10-Q for the period ended September 30, 2004.60Under the terms of the Consent, we agreed, subject to certain defined exceptions, to limit sales of all products sold to our direct customers (including wholesalers, distributors, hospitals, retail outlets, pharmacies and government purchasers) based on expected demand or on amounts that do not exceed approximately one month of inventory on hand, without making a timely public disclosure of any change in practice. We also agreed in the Consent to certain measures that we have implemented including: (a) establishing a formal review and certification process of our annual and quarterly reports filed with the SEC; (b) establishing a business risk and disclosure group; (c) retaining an outside consultant to comprehensively study and help re-engineer our accounting and financial reporting processes; (d) publicly disclosing any sales incentives offered to direct customers for the purpose of inducing them to purchase products in excess of expected demand; and (e) ensuring that our budget process gives appropriate weight to inputs that come from the bottom to the top, and not just from the top to the bottom, and adequately documenting that process.
We have established a company-wide policy concerning our sales to direct customers for the purpose of complying with the Consent, which includes the adoption of various procedures to monitor and limit sales to direct customers in accordance with the terms of the Consent. These procedures include a governance process to escalate to appropriate management levels potential questions or concerns regarding compliance with the policy and timely resolution of such questions or concerns. In addition, compliance with the policy is monitored on a regular basis.We maintain DSAs with our U.S. pharmaceutical wholesalers, which account for nearly 100% of our gross U.S. revenues. Under the current terms of the DSAs, our wholesaler customers provide us with weekly information with respect to months on hand product-level inventories and the amount of out-movement of products. The three largest wholesalers currently account for approximately 85% of our gross U.S. revenues. The inventory information received from our wholesalers, together with our internal information, is used to estimate months on hand product level inventories at these wholesalers. We estimate months on hand product inventory levels for our U.S. business’s wholesaler customers other than the three largest wholesalers by extrapolating from the months on hand calculated for the three largest wholesalers. In contrast, our non-U.S. business has significantly more direct customers, limited information on direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information, where available, varies widely. Accordingly, we rely on a variety of methods to estimate months on hand product level inventories for these business units.We believe the above-described procedures provide a reasonable basis to ensure compliance with the Consent.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 affect our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because 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.
Revenue Recognition
Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates. Revenue is recognized following a five-step model: (i) identify the customer contract; (ii) identify the contract’s performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation; and (v) recognize revenue when or as a performance obligation is satisfied. Revenue is also reduced for GTN sales adjustments discussed below, all of which involve significant estimates and judgment after considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix (e.g. Medicare or Medicaid), current contract prices under applicable programs, unbilled claims and processing time lags and inventory levels in the distribution channel. Estimates are assessed each period and adjusted as required to revise information or actual experience.
The following categories of GTN adjustments involve significant estimates, judgments and information obtained from external sources. Refer to “Item 8. Financial Statements and Supplementary Data—Note 2. Revenue” for further discussion and analysis of each significant category of GTN sales adjustments.
Charge-backs and cash discounts
Our U.S. business participates in programs with government entities, the most significant of which are the U.S. Department of Defense and the U.S. Department of Veterans Affairs, and other parties, including covered entities under the 340B program, whereby pricing on products is extended below wholesaler list price to participating entities. These entities purchase products through wholesalers at the lower program price and the wholesalers then charge us the difference between their acquisition cost and the lower program price. Accounts receivable is reduced for the estimated amount of unprocessed charge-back claims attributable to a sale (typically within a two to four week time lag).61
In the U.S. and certain other countries, customers are offered cash discounts as an incentive for prompt payment, generally approximating 2% of the invoiced sales price. Accounts receivable is reduced for the estimated amount of cash discount at the time of sale and the discount is typically taken by the customer within one month.Medicaid and Medicare rebates
Our U.S. business participates in state government Medicaid programs and other qualifying Federal and state government programs requiring discounts and rebates to participating state and local government entities. All discounts and rebates provided through these programs are included in our Medicaid rebate accrual. Medicaid rebates have also been extended to drugs used in managed Medicaid plans. The estimated amount of unpaid or unbilled rebates is presented as a liability.Rebates and discounts are offered to managed healthcare organizations in the U.S. managing prescription drug programs and Medicare Advantage prescription drug plans covering the Medicare Part D drug benefit. We also pay a 70% point of service discount to the CMS when the Medicare Part D beneficiaries are in the coverage gap. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.Other rebates, returns, discounts and adjustments
Other GTN sales adjustments include sales returns and all other programs based on applicable laws and regulations for individual non-U.S. countries as well as rebates offered to managed healthcare organizations in the U.S. to a lesser extent. The non-U.S. programs include several different pricing schemes such as cost caps, volume discounts, outcome-based pricing schemes and pricing claw-backs that are based on sales of individual companies or an aggregation of all companies participating in a specific market. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.Estimated returns for established products are determined after considering historical experience and other factors including levels of inventory in the distribution channel, estimated shelf life, product recalls, product discontinuances, price changes of competitive products, introductions of generic products, introductions of competitive new products and lower demand following the loss of market exclusivity. Estimated returns for new products are determined after considering historical sales return experience of similar products, such as those within the same product line, similar therapeutic area and/or similar distribution model and estimated levels of inventory in the distribution channel and projected demand. The estimated amount for product returns is presented as a liability.
Use of information from external sources
Information from external sources is used to estimate GTN adjustments. Our estimate of inventory at the wholesalers is based on the projected prescription demand-based sales for our products and historical inventory experience, as well as our analysis of third-party information, including written and oral information obtained from certain wholesalers with respect to their inventory levels and sell-through to customers and third-party market research data, and our internal information. The inventory information received from wholesalers is a product of their recordkeeping process and excludes inventory held by intermediaries to whom they sell, such as retailers and hospitals.
We have also continued the practice of combining retail and mail prescription volume on a retail-equivalent basis. We use this methodology for internal demand forecasts. We also use information from external sources to identify prescription trends, patient demand and average selling prices. Our estimates are subject to inherent limitations of estimates that rely on third-party information, as certain third-party information was itself in the form of estimates, and reflect other limitations including lags between the date as of which third-party information is generated and the date on which we receive third-party information.
Acquisition and Intangible Assets Valuations
We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations. If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets. We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets. If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business.
We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date. Excess of consideration over the fair value of net assets acquired is recorded as goodwill. Estimating fair value requires us to make significant judgments and assumptions.62In transactions accounted for as acquisitions of assets, no goodwill is recorded and contingent consideration, such as payments upon achievement of various developmental, regulatory and commercial milestones, generally is not recognized at the acquisition date. In an asset acquisition, upfront payments allocated to IPRD projects at the acquisition date are expensed unless there is an alternative future use. In addition, product development milestones are expensed upon achievement.
We have identifiable intangible assets that are measured at their respective fair values as of the acquisition date. Generally, we engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. The fair value of these assets is estimated using discounted cash flow models. These models required the use of the following significant estimates and assumptions among others:
• Identification of product candidates with sufficient substance requiring separate recognition;
• Estimates of revenues and operating profits related to commercial products or product candidates;
• Eligible patients, pricing and market share used in estimating future revenues;
• Probability of success for unapproved product candidates and additional indications for commercial products;
• Resources required to complete the development and approval of product candidates;
• Timing of regulatory approvals and exclusivity;
• Appropriate discount rate by products;
• Market participant income tax rates; and
• Allocation of expected synergies to products.
We believe the fair value used to record intangible assets acquired are based upon reasonable estimates and assumptions considering the facts and circumstances as of the acquisition date.Impairment and Amortization of Long-lived Assets, including Intangible Assets
Long-lived assets include intangible assets and property, plant and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable or at least annually for IPRD. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products or IPRD. These assets are initially measured at fair value and therefore any reduction in expectations used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include changes in competitive landscape, earlier than expected loss of market exclusivity, pricing reductions, adverse regulatory changes or clinical study results, delay or failure to obtain regulatory approval for initial or follow on indications and unanticipated development costs, inability to achieve expected synergies resulting from cost savings and avoidance, higher operating costs, changes in tax laws and other macro-economic changes. The complexity in estimating the fair value of intangible assets in connection with an impairment test is similar to the initial valuation. If the carrying value of long-lived assets exceeds its fair value, then the asset is written-down to its fair value. Expectations of future cash flows are subject to change based upon the near and long-term production volumes and margins generated by the asset as well as any potential alternative future use. The estimated useful lives of long-lived assets is subjective and requires significant judgment regarding patent lives, future plans and external market factors. Long-lived assets are also periodically reviewed for changes in facts or circumstances resulting in a reduction to the estimated useful life of the asset, requiring the acceleration of depreciation or amortization. Impairment charges included in Cost of products sold and Research and development expense were $136 million in 2023, $101 million in 2022 and $1.2 billion in 2021. Refer to “Item 8. Financial Statements and Supplementary Data—Note 15. Goodwill and Other Intangible Assets” for further discussion and analysis of these impairment charges.Income TaxesValuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including long-range forecasts of future taxable income and evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. Our deferred tax assets were $7.3 billion at December 31, 2023 (net of valuation allowance of $764 million) and $4.1 billion at December 31, 2022 (net of valuation allowance of $873 million).
The U.S. federal net operating loss carryforwards were $420 million at December 31, 2023. These carryforwards were acquired as a result of certain acquisitions and are subject to limitations under Section 382 of the Internal Revenue Code. The net operating loss carryforwards expire in varying amounts beginning in 2024. The foreign and state net operating loss carryforwards expire in varying amounts beginning in 2024 (certain amounts have unlimited lives).
63Liabilities are established for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, transfer pricing matters, tax credits and deductibility of certain expenses. Such liabilities represent a reasonable provision for taxes ultimately expected to be paid and may need to be adjusted over time as more information becomes known.
For discussions on income taxes, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards—Income Taxes” and “—Note 7. Income Taxes.”
Contingencies
In the normal course of business, we are subject to contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, contractual claims and tax matters. We recognize accruals for such contingencies when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. These estimates are subject to uncertainties that are difficult to predict and, as such, actual results could vary from these estimates.
For discussions on contingencies, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards—Contingencies,” “—Note 7. Income Taxes” and “—Note 20. Legal Proceedings and Contingencies.”Product and Pipeline DevelopmentsOur 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. Spending on these programs represents approximately 46% of our annual R&D expenses in the last three years. Opdivo was the only investigational compound or marketed product that represented approximately 10% of our R&D expenses in the last three years. Our late-stage development programs could potentially have an impact on our revenue and earnings within the next few years if regulatory approvals are obtained and products are successfully commercialized. The following are the late-stage new indication developments in our marketed products, as well as developments in our late-stage pipeline through February 2, 2024:Product Indication Date DevelopmentsOpdivo
Bladder December 2023 Ono, our alliance partner for Opdivo in Japan, announced that it has submitted a supplemental application of Opdivo Intravenous Infusion, a human anti-human PD-1 monoclonal antibody in Japan, to expand its use for the treatment of unresectable urothelial carcinoma, for a partial change in approved items of the manufacturing and marketing approval. The application is based on the results from the sub-study of the Phase III CheckMate -901 trial.
December 2023 Announced that the FDA accepted the sBLA for Opdivo in combination with cisplatin-based chemotherapy as a first-line treatment for adult patients with unresectable or metastatic urothelial carcinoma. The application is based on results from the Phase III CheckMate -901 trial. The FDA granted the application Priority Review status and assigned a PDUFA goal date of April 5, 2024.
October 2023 Announced that the EMA validated its type II variation application of Opdivo in combination with cisplatin-based chemotherapy as a first-line treatment for adult patients with unresectable or metastatic urothelial carcinoma. The application is based on results from the Phase III CheckMate -901 trial. Application validation confirms the submission is complete and begins the EMA's centralized review procedure.
Melanoma October 2023 Announced FDA approval of Opdivo for the adjuvant treatment of adult and pediatric patients 12 years and older with completely resected stage IIB or IIC melanoma. The approval is based on the Phase III CheckMate -76K trial.
August 2023 Announced EC approval of Opdivo as a monotherapy for the adjuvant treatment of adults and adolescents 12 years of age and older with stage IIB or IIC melanoma who have undergone complete resection. The approval is based on results from the Phase III CheckMate -76K trial.
Malignant Mesothelioma
November 2023 Ono, our alliance partner for Opdivo in Japan, announced that they have received supplemental approval of Opdivo Intravenous Infusion, a human anti-human PD-1 monoclonal antibody in Japan, for expanded use for the treatment of malignant mesothelioma (excluding malignant pleural mesothelioma), for a partial change in approved items of the manufacturing and marketing approval. The supplemental approval is based on results from the investigator-initiated clinical Phase II VIOLA trial.
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Product Indication Date Developments
Opdivo
NSCLC October 2023 Announced follow-up results from the Phase III CheckMate -816 trial, demonstrating sustained event-free survival and promising overall survival trends with three cycles of Opdivo in combination with platinum-based chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC, regardless of PD-L1 expression levels. Neoadjuvant Opdivo with chemotherapy also showed improvements in pathologic complete response and major pathologic response over chemotherapy alone in PD-L1>1% and <1% patient populations. The safety profile of the Opdivo -based regimen was consistent across all PD-L1 subgroups.
October 2023 Announced that the first disclosure of data from the Phase III CheckMate -77T trial evaluating perioperative regimen of neoadjuvant Opdivo with chemotherapy followed by surgery and adjuvant Opdivo in patients with resectable stage IIA to IIIB NSCLC showed statistically significant and clinically meaning improvement in the primary efficacy endpoint of event-free survival as assessed by Blinded Independent Central Review compared to neoadjuvant chemotherapy and placebo followed by surgery and adjuvant placebo.
NSCLC
June 2023 Announced EC approval of Opdivo in combination with platinum-based chemotherapy for the neoadjuvant treatment of resectable NSCLC at a high risk of recurrence in adult patients with tumor cell PD-L1 expression > 1%. The approval is based on results from the Phase III CheckMate -816 trial.
March 2023 Ono, our alliance partner for Opdivo in Japan, announced the Japan's Ministry of Health, Labour and Welfare's supplemental approval of Opdivo plus chemotherapy for the neoadjuvant treatment of patients with resectable NSCLC. The approval is based on results from the Phase III CheckMate -816 trial.
Prostate Cancer July 2023 Announced that results from the Phase III CheckMate -7DX trial evaluating Opdivo in combination with docetaxel in patients with advanced or metastatic castration-resistant prostate cancer did not meet the primary endpoints of radiographic progressive free survival at final analysis, nor overall survival at an interim analysis. No safety concerns were reported. Based on the recommendation from the DMC, the Company has decided to discontinue the study.
RCC January 2024 Announced data from the Phase III CheckMate -67T trial, evaluating subcutaneous nivolumab co-formulated with Halozyme’s proprietary recombinant human hyaluronidase compared to intravenous Opdivo in patients with advanced or metastatic clear cell RCC who have received prior systemic therapy, demonstrated non-inferiority for the co-primary endpoints of Cavgd28 (time-averaged Opdivo serum concentration over 28 days) and Cminss (trough serum concentration at steady state) compared to intravenous Opdivo . In addition, subcutaneous nivolumab displayed non-inferior objective response rate as assessed by Blinded Independent Central Review versus intravenous Opdivo .
January 2024 Announced four-year follow-up results from the CheckMate -9ER trial evaluating Opdivo in combination with Cabometyx* (cabozantinib) vs. sunitinib in patients with previously untreated advanced or metastatic RCC continued to show superior progression-free survival and objective response rates in patients treated with Opdivo plus Cabometyx* over sunitinib, regardless of risk classification based on IMDC scores. Superior overall survival was also observed in patients treated with the combination.
October 2023 Announced that the Phase III CheckMate -67T noninferiority trial evaluating the subcutaneous formulation of Opdivo co-formulated with Halozyme Therapeutics’ proprietary recombinant human hyaluronidase (rHPuH20) ("subcutaneous nivolumab") compared to intravenous (IV) Opdivo in patients with advanced or metastatic clear cell renal cell carcinoma (ccRCC) who have received prior systemic therapy met its co-primary pharmacokinetics endpoints and key secondary endpoint. Subcutaneous nivolumab demonstrated noninferiority of Cavgd28 (time-averaged Opdivo serum concentration over 28 days) and Cminss (trough serum concentration at steady state) compared to IV Opdivo , the study’s co-primary endpoints. Additionally, subcutaneous nivolumab showed a noninferior objective response rate as assessed by Blinded Independent Central Review vs. IV Opdivo , a key secondary endpoint. The safety profile of subcutaneous nivolumab was consistent with the IV formulation.
UC February 2023 Announced three-year results from the Phase III CheckMate -274 trial demonstrating significant sustained clinical benefits with Opdivo for the adjuvant treatment of patients with surgically resected, high-risk muscle-invasive UC and continuous improvement in disease-free survival, non-urothelial tract recurrence-free survival, distant metastasis-free survival and second progression-free survival compared to placebo across all-randomized patients and in patients whose tumor cells express PD-L1 ≥1%.
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Product Indication Date Developments
Opdivo+Yervoy RCC
January 2024 Announced that eight-year data from the Phase III CheckMate -214 trial evaluating Opdivo plus Yervoy versus sunitinib continued to demonstrate long-term survival results, reducing the risk of death by 28% in patients with previously untreated advanced or metastatic RCC, regardless of IMDC risk group. Patients treated with Opdivo plus Yervoy maintained superior survival and more durable response benefits compared to those who received sunitinib in both patients with intermediate- and poor-risk prognostic factors and across all randomized patients.
Metastatic Colorectal Cancer
January 2024 Announced that the Phase III CheckMate -8HW trial evaluating Opdivo plus Yervoy compared to investigator’s choice of chemotherapy as a first-line treatment for patients with microsatellite instability-high or mismatch repair deficient metastatic colorectal cancer met the dual primary endpoint of progression-free survival (PFS) as assessed by Blinded Independent Central Review (BICR) at a pre-specific interim analysis. The study is ongoing to assess the second dual primary endpoint of PFS per BICR in patients receiving Opdivo plus Yervoy compared to Opdivo alone across all lines of therapy, as well as secondary endpoints.
In addition, data from the Phase III CheckMate -8HW trial showed that the combination of Opdivo plus Yervoy reduced the risk of disease progression or death by 79% versus chemotherapy as a first-line treatment for patients with microsatellite instability–high or mismatch repair deficient metastatic colorectal cancer (MSI-H/dMMR mCRC) compared to chemotherapy.
NSCLC September 2023 Announced six-year results from the Phase III CheckMate -227 trial demonstrating long-term, durable survival benefits of Opdivo plus Yervoy compared to chemotherapy in the first-line treatment of patients with metastatic NSCLC, regardless of PD-L1 expression levels.
June 2023 Announced four-year follow-up results from the Phase III CheckMate -9LA trial demonstrating durable, long-term survival benefits with Opdivo plus Yervoy with two cycles of chemotherapy compared to four cycles of chemotherapy alone in previously untreated patients with metastatic NSCLC.
Reblozyl MDS January 2024 Announced that Japan's Ministry of Health, Labour and Welfare granted manufacturing and marketing approval for Reblozyl for MDS-related anemia. The approval is based on the results of the global Phase III COMMANDS trial and the Phase III MEDALIST study, as well as a Japanese Phase II study (Study MDS-003) in red blood cell transfusion-independent low-risk MDS patients.
December 2023 Announced updated results from the primary analysis of the Phase III COMMANDS trial, comparing Reblozyl versus epoetin alfa for the treatment of anemia in erythropoiesis stimulating agent (ESA)-naïve patients with lower-risk myelodysplastic syndromes who may require red blood cell transfusions, which confirmed positive outcome of the interim analysis with superior efficacy and durability compared to ESAs.
August 2023 Announced FDA approval of Reblozyl for the treatment of anemia without previous erythropoiesis stimulating agent use (ESA-naïve) in adult patients with very low- to intermediate-risk MDS who may require regular red blood cell transfusions. The approval is based on the Phase III COMMANDS trial.
Beta Thalassemia March 2023 Announced EC approval of Reblozyl for the treatment in adult patients of anemia associated with non-transfusion-dependent beta thalassemia. The approval is based on results from the Phase II BEYOND study.
Opdualag
Colorectal Cancer
December 2023 The Phase III RELATIVITY-123 trial evaluating the fixed-dose combination of nivolumab and relatlimab for the treatment of microsatellite stable metastatic colorectal cancer patients whose disease has progressed following at least one, but no more than four, prior lines of therapy for metastatic disease will be discontinued due to futility based on a planned analysis conducted by an independent data monitoring committee. It was determined that the trial was unlikely to meet its primary endpoints upon completion. The recommendation to stop the study was not based on safety concerns.
Abecma
Multiple Myeloma
January 2024 Announced that the CHMP of the EMA has recommended the approval of Abecma in earlier lines of therapy for triple-class exposed relapsed and refractory multiple myeloma. The CHMP recommendation will now be reviewed by the EC, which has the authority to approve medicines for the EU. Recommendation for approval was based on Phase III KarMMa-3 study in which Abecma demonstrated superiority over standard regimens, significantly improved progression-free survival and a well-established safety profile with mostly low-grade occurrences of cytokine release syndrome and neurotoxicity.66
Product Indication Date DevelopmentsAbecma
Multiple Myeloma
December 2023 Announced results from the preplanned final progression-free survival analysis of the pivotal Phase III, open-label, global, randomized controlled KarMMa-3 study demonstrated a significantly improved PFS maintained with Abecma compared to standard regimens, with a 51% reduction in the risk of disease progression or death.
December 2023 Announced that Japan's Ministry of Health, Labour and Welfare granted manufacturing and marketing approval of the supplemental New Drug Application for an additional indication for Abecma for patients with relapsed or refractory multiple myeloma who have received at least two prior therapies, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 antibody. The approval is based on the interim analysis from the Phase III KarMMa-3 study.
April 2023 Announced with our alliance partner, 2seventy bio, that the FDA accepted the sBLA for Abecma for the treatment of adult patients with relapsed and refractory multiple myeloma who have received an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.
Zeposia
Multiple Sclerosis
October 2023 Announced data from the Phase III DAYBREAK and RADIANCE trials showing that after eight years of follow-up, 76% of patients treated with Zeposia for relapsing multiple sclerosis were free of six-month confirmed disability progression. Findings also demonstrated treatment with Zeposia resulted in low rates of progression independent relapse activity and relapse-associated worsening, key drivers of disease progression and permanent disability in multiple sclerosis.
Also announced that first interim readout from the Phase IIIb ENLIGHTEN trial showing clinically meaningful improvement in cognitive functioning compared to baseline after one year of Zeposia treatment in almost half of patients with early relapsing multiple sclerosis.
Breyanzi
Lymphoma
January 2024 Announced the FDA accepted sBLAs for Breyanzi to expand into new indications to include the treatment of adult patients with relapsed or refractory follicular lymphoma (FL) and relapsed or refractory mantle cell lymphoma (MCL) after a Bruton tyrosine kinase inhibitor. The FDA granted both applications Priority Review and assigned a PDUFA goal date of May 23, 2024, for Breyanzi in relapsed or refractory FL and May 31, 2024, for Breyanzi in relapsed or refractory MCL.
In addition, Japan's Ministry of Health, Labour and Welfare has also accepted the company's supplemental New Drug Application (sNDA) for Breyanzi for the treatment of relapsed or refractory FL.
In relapsed or refractory FL, the applications for Breyanzi in the U.S. and Japan are based on results from the TRANSCEND FL study. In relapsed or refractory MCL, the application for Breyanzi in the U.S. is based on results from the MCL cohort of the TRANSCEND NHL 001 study.
December 2024 Announced first disclosure of primary analysis results from the high-risk, second-line cohort of the Phase II TRANSCEND FL study evaluating Breyanzi in patients with relapsed or refractory follicular lymphoma (FL) demonstrated 95.7% complete response for patients with high-risk relapsed or refractory FL treated in the second-line setting.
November 2024 Announced that the FDA accepted the sBLA for Breyanzi to expand its current indication to include the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia or small lymphocytic lymphoma who received a prior Bruton tyrosine kinase inhibitor and B-cell lymphoma 2 inhibitor. The FDA granted the application Priority Review and assigned a PDUFA goal date of March 14, 2024.
May 2023 Announced EC approval of Breyanzi for the treatment of adult patients with diffuse large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and FL grade 3B, who relapsed within 12 months from completion of, or are refractory to, first-line chemoimmunotherapy. The approval is based on results from the Phase III TRANSFORM trial.67
Product Indication Date DevelopmentsSotyktu Plaque Psoriasis October 2023 Announced results from the POETYK PSO LTE trial of Sotyktu treatment in adult patients with moderate-to-severe plaque psoriasis. Clinical response rates were maintained with continuous treatment with modified nonresponder imputation responses of 73.2% for Psoriasis Area and Severity Index (PASI) 75 with 3 years of continuous Sotyktu treatment. Sotyktu had a consistent safety profile with no increases in adverse events or serious adverse events and no new safety signals.
March 2023 Announced EC approval of Sotyktu for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy. The approval was based on Phase III POETYK PSO-1 and POETYK PSO-2 clinical trials as well as additional data from the POETYK PSO long-term extension trial.
Camzyos Obstructive HCM August 2023 Announced long-term follow-up results from the Phase III VALOR-HCM LTE trial demonstrating the consistent impact of oral treatment for severely symptomatic obstructive HCM patients by showing that nearly 9 out of 10 patients treated with Camzyos have continued in the trial without septal reduction therapy at either 40 or 56 weeks of treatment.
Also announced results from the Phase III EXPLORER-LTE trial showing treatment with Camzyos demonstrated sustained improvements in left ventricular outflow tract obstruction, symptoms and NT-proBNP levels in patients with symptomatic obstructive HCM. No new safety signals were observed.
June 2023 Announced EC approval of Camzyos for the treatment of symptomatic (New York Heart Association, class II-III) obstructive HCM in adult patients. The approval is based on results from the Phase III EXPLORER-HCM and VALOR-HCM trials.
Augtyro
(repotrectinib)
NSCLC November 2023 Announced FDA approval of Augtyro for the treatment of patients with ROS1-positive locally advanced or metastatic NSCLC. The approval is based on the Phase I/II TRIDENT-1 trial.
repotrectinib
NSCLC January 2024 The EMA validated the marketing authorization application for repotrectinib as a treatment for ROS1 tyrosine kinase inhibitor (TKI)-naïve and -pretreated adult patients with ROS1-positive locally advanced or metastatic NSCLC and TKI-naïve and -pretreated adult and pediatric patients 12 years and older with NTRK-positive locally advanced or metastatic solid tumors. The application was based on results from the registrational Phase I/II TRIDENT-1 trial and CARE study.
milvexian Thrombosis May 2023 Announced with our alliance partner Janssen Pharmaceuticals Inc., a Johnson & Johnson company, that all three prospective indications for milvexian, an investigational oral factor XIa inhibitor, have been granted Fast Track Designation by the FDA. The designations cover all three indication-seeking studies within the Phase III Librexia development program: Librexia STROKE, Librexia ACS and Librexia AF, which are all dosing patients.
BMS-986278 (LPA 1 )
Progressive Pulmonary Fibrosis October 2023 Announced that the FDA has granted Breakthrough Therapy Designation for BMS-986278, a potential first-in-class, oral, lysophosphatidic acid receptor 1 (LPA 1 ) antagonist, for the treatment of progressive pulmonary fibrosis (PPF). The Breakthrough Therapy Designation is based on results from the global, randomized Phase II study that assessed the safety and efficacy of BMS-986278 treatment versus placebo in people living with idiopathic pulmonary fibrosis (IPF) and PPF. Stable background use of antifibrotics in the IPF cohort and/or select immunosuppressives in the PPF cohort were allowed.68Special Note Regarding Forward-Looking StatementsThis 2023 Form 10-K (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. We have included important factors in the cautionary statements included in this 2023 Form 10-K, particularly under “Item 1A. Risk 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 2023 Form 10-K 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 2023 Form 10-K.
FY 2025-12-31 (later)
Item 7. 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 notes included elsewhere in this 2025 Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows. Certain amounts in this 2025 Form 10-K may not sum due to rounding. Percentages have been calculated using unrounded amounts.
The comparison of 2024 to 2023 results has been omitted from this Form 10-K and is incorporated by reference from our Form 10-K for the year ended December 31, 2024 “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” filed on February 12, 2025.EXECUTIVE SUMMARYBristol-Myers Squibb Company is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. Refer to the Summary of Abbreviated Terms at the end of this 2025 Form 10-K for definitions of capitalized terms used throughout the document.
In 2025, we have achieved multiple regulatory approvals across our portfolio, including the: (i) approval of Breyanzi for adults with relapsed or refractory FL and MCL in the EU, (ii) approval of Camzyos for the treatment of symptomatic obstructive HCM in Japan, (iii) approval of Opdivo + Yervoy as a first-line treatment of adult patients with unresectable or advanced HCC in both the U.S. and the EU, (iv) approval of Opdivo + Yervoy for first-line treatment of adults and pediatric patients 12 years and older with unresectable or metastatic MSI-High or dMMR colorectal cancer in the U.S. and Japan, (v) approval of Opdivo as a perioperative regimen for resectable high risk NSCLC in the EU, (vi) approval of Opdivo Qvantig for use across multiple adult solid tumors in the EU, and (vii) approval of Breyanzi for the treatment of adults with relapsed or refractory MZL in the U.S. Additionally, we received label updates from the FDA that have reduced or removed certain patient monitoring requirements associated with the use of Camzyos , Breyanzi and Abecma .
We continue to pursue activities to advance and expand our pipeline through our internal research and development efforts as well as through business development activities. In 2025, the Company (i) acquired Orbital Therapeutics, which provided the Company with full rights to OTX-201, a preclinical in vivo CAR T-cell therapy currently in IND-enabling studies for autoimmune disease, (ii) entered into a strategic collaboration with BioNTech to co-develop and co-commercialize BioNTech's investigational bispecific antibody pumitamig (BNT327/BMS986545) across multiple solid tumor types, (iii) acquired a global exclusive license from Philochem for OncoACP3, a radiopharmaceutical therapeutic and diagnostic agent targeting prostate cancer, and (iv) expanded our development and manufacturing capabilities by opening a new radiopharmaceutical facility in Indianapolis, Indiana, which will support RPTs acquired in connection with the RayzeBio acquisition. For additional information relating to our acquisitions, divestitures, licensing and other arrangements refer to "Item 8. Financial Statements and Supplementary Data — Note 3. Alliances" and "Item 8. Financial Statements and Supplementary Data— 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. As previously announced, our ongoing strategic productivity initiative includes acceleration of the delivery of medicines to patients by evolving and streamlining our enterprise operating model in key areas such as R&D, manufacturing, commercial and other functions. We continue to expect to realize approximately $2.0 billion in cost savings by the end of 2027 in connection with the 2025 expansion of our ongoing strategic productivity initiative. The exit costs resulting from these actions are included in our updated 2023 Restructuring Plan.
41Financial Highlights
Year Ended December 31,Dollars in millions, except per share data 2025 2024
Total Revenues $ 48,194 $ 48,300
Diluted Earnings/(Loss) Per Share
GAAP $ 3.46 $ (4.41)
Non-GAAP 6.15 1.15
Revenues were relatively flat in 2025. Demand increased across the Growth Portfolio and for Eliquis , which was offset by the impact of generics across the remainder of the Legacy Portfolio. Additionally, revenues were impacted by higher U.S. government channel rebates in 2025. We expect continued generic erosion within our Legacy Portfolio in 2026 primarily due to Revlimid and Pomalyst in the U.S.
The $7.87 change in GAAP EPS in 2025 was primarily due to lower Acquired IPRD charges, the impact of certain specified items, including lower amortization of acquired intangible assets and lower intangible asset impairment charges, and cost savings from our ongoing strategic productivity initiative in 2025. After adjusting for specified items, the $5.00 increase in non-GAAP EPS was primarily due to the aforementioned lower Acquired IPRD charges and cost savings from our ongoing strategic productivity initiative.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 a detailed listing of all specified items and further information, reconciliations and changes to our non-GAAP financial measures refer to “—Non-GAAP Financial Measures.”
Economic and Market Factors
Governmental ActionsAs regulators continue to focus on prescription drugs, our products are facing increased pressures across the portfolio. These pressures stem from legislative and policy changes, including price controls, pharmaceutical market access, discounting, changes to tax and importation laws and other restrictions in the U.S., EU and other regions around the world. These pressures have resulted in lower prices, lower reimbursement rates and smaller populations for whom payers will reimburse, which have negatively impacted, and may continue to negatively impact our results of operations (including intangible asset impairment charges), operating cash flow, liquidity and financial flexibility. In August 2024, as part of the first round of government price setting pursuant to the IRA, the HHS announced the "maximum fair price" for a 30-day equivalent supply of Eliquis , which applies to the U.S. Medicare channel effective January 1, 2026. In November 2025, the HHS announced the "maximum fair price" for a 30-day supply of Pomalyst , which applies to the U.S. Medicare channel effective January 1, 2027. In January 2026, the HHS selected Orencia as a medicine subject to "negotiation" for government-set prices beginning in 2028. It is possible that more of our products could be selected in future years based upon the selection criteria currently utilized by the HHS or potentially expanded future criteria, or that the "maximum fair price" for our previously selected products could be renegotiated, each of which could, among other things, accelerate revenue erosion prior to expiry of intellectual property protections. 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.
In December 2025, we announced the U.S. Government Agreement pursuant to which we agreed to, among other things: (i) provide Eliquis for free to the Medicaid program effective January 1, 2026; (ii) donate more than seven tons of Eliquis API to fill the U.S. Strategic Active Ingredient Reserve; (iii) enable direct-to-patient access to Sotyktu , Zeposia , Reyataz , Baraclude and Orencia for cash-paying patients at discounts approximately 80% off current list prices; (iv) adopt a more balanced pricing approach for new launches across developed nations; and (v) continue to expand domestic production. This agreement, and any potential future agreements with government entities, by us or our competitors, could result in reduced prices and reimbursement for certain of our or competing products and may impact our cash flows and results of operations.
Further, the U.S. and other countries have recently imposed, and may continue to impose, new tariffs. While pharmaceuticals are largely exempt from the tariffs imposed in 2025, such exemptions may be terminated or may not apply to any future tariffs. In accordance with the U.S. Government Agreement, BMS will receive certain U.S. tariff relief until January 2029 and will not be subject to future pricing mandates in the U.S., however, such exemptions may be terminated or may not be extended. In addition, we remain subject to any current or future pricing mandates implemented outside of the U.S. It is possible that such regulations may result in a material impact on our business and results of operations.
42
At the state level, multiple states have passed, are pursuing or are considering government action via legislation or regulations to change drug pricing and reimbursement (e.g., establishing prescription drug affordability boards, implementing manufacturer mandates tied to the Federal Public Health Service Act drug pricing program, etc.). Some of these state-level actions 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 Act drug pricing program, certain states have enacted laws regulating manufacturer pricing obligations under the program to date. Several additional states are considering similar potential legislation or other government actions, and we expect other states may do the same in the future.
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”, “—We could lose market exclusivity of a product earlier than expected”, “—We could experience difficulties, delays and disruptions in our supply chain as well as in the manufacturing, distribution and sale of our products” and “—Changes to tax regulations could negatively impact our earnings”.
43
Significant Product and Pipeline Approvals
The following is a summary of the significant approvals received:Product Date ApprovalBreyanzi
December 2025
FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory MZL who have received at least two prior lines of systemic therapy.
Breyanzi
November 2025
EC approval of Breyanzi for the treatment of adult patients with relapsed or refractory MCL after at least two lines of systemic therapy including a Bruton's tyrosine kinase inhibitor.AugtyroNovember 2025
Japan’s Ministry of Health Labour and Welfare approval of Augtyro for the treatment of NTRK fusion-positive, advanced or recurrent solid tumors.
Opdivo + Yervoy August 2025
Japan’s Ministry of Health Labour and Welfare approval of Opdivo + Yervoy for the treatment of unresectable advanced or recurrent microsatellite instability-high colorectal cancer.
Opdivo + Yervoy June 2025 Japan’s Ministry of Health Labour and Welfare approval of Opdivo + Yervoy for the treatment of unresectable HCC.
Inrebic June 2025 Japan’s Ministry of Health Labour and Welfare approval of Inrebic for the treatment of myelofibrosis.
Opdivo Qvantig May 2025 EC approval of Opdivo Qvantig for use across multiple adult solid tumors as monotherapy, monotherapy maintenance following completion of intravenous Opdivo plus Yervoy combination therapy, or in combination with chemotherapy or cabozantinib.
Opdivo May 2025 EC approval for perioperative regimen of neoadjuvant Opdivo and chemotherapy followed by surgery and adjuvant Opdivo for the treatment of resectable NSCLC at high-risk of recurrence in adult patients whose tumors have PD-L1 expression ≥1%.
Opdivo + Yervoy
April 2025
FDA approval of Opdivo + Yervoy as a first-line treatment of adult patients with unresectable or metastatic HCC.
Opdivo + Yervoy April 2025 FDA approval of Opdivo + Yervoy as a first-line treatment of adult and pediatric patients with unresectable or metastatic microsatellite instability-high or mismatch repair deficient CRC.
Camzyos March 2025 Japan’s Ministry of Health Labour and Welfare approval of Camzyos for the treatment of oHCM.
Breyanzi March 2025 EC approval of Breyanzi for the treatment of adult patients with relapsed or refractory FL after two or more lines of systemic therapy.
Opdivo + Yervoy March 2025 EC approval of Opdivo + Yervoy for the first-line treatment of adult patients with unresectable or advanced HCC.
Augtyro
February 2025
EC approval for Augtyro as a treatment for adult patients with ROS1-positive NSCLC and for adult and pediatric patients 12 years of age and older with NTRK-positive solid tumors.
Refer to “—Product and Pipeline Developments” for all of the developments in our marketed products and late-stage pipeline in 2025 and in early 2026.
44StrategyOur 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 focus as a biopharmaceutical company is on discovering, developing and delivering transformational medicines for patients facing serious diseases in areas where we believe that we have an opportunity to make a meaningful difference: oncology, hematology, immunology, cardiovascular, neuroscience and other areas where we can also create long-term value. Our priorities are to focus on transformational medicines where we have a competitive advantage, drive operational excellence throughout the organization and strategically allocate capital for long-term growth and shareholder returns.
Our R&D strategy is designed to invest in the most promising science and to consistently execute in a way that translates that science into new medicines with the highest probability of success. To execute this strategy, we focus on three key priorities: science, execution, and value. We have a disease-focused strategy that incorporates lead and supporting assets and pursues high-impact medicines to advance standards of care across our core therapeutic areas. To accelerate progress, we have taken steps to increase the probability of success in our clinical trials and are infusing artificial intelligence throughout our R&D process. Together, these efforts enable us to prioritize programs more deliberately and effectively, delivering novel therapies for patients and driving long-term growth.
In oncology, we are focused on extending and strengthening our leadership in IO, as well as diversifying beyond IO. During 2025, we entered into a global strategic collaboration with BioNTech for the co-development and co-commercialization of pumitamig (BNT327/BMS986545), a potentially transformative PD-L1/VEGF-A bispecific that could set a new standard of care across multiple tumor types. Additionally, we believe we have significant opportunity in radiopharmaceuticals as a new oncology modality with opportunities to advance RYZ101, RYZ401 and RYZ801. In hematology, we see significant potential with our targeted protein degradation platform, which includes potentially first-in-class CELMoDs currently under investigation for multiple myeloma with iberdomide and mezigdomide and lymphoma with golcadomide as well as a potentially first-in-class BCL6 LDD with BMS-986458. In cell therapy, we are building on our expertise and leadership, developing next generation CAR-T treatments with first-in-class potential, including in vivo CAR-T cell therapies. We are investigating arlo-cel in pivotal studies targeting multiple myeloma and advancing development for zola-cel (CD19-targeted NEX-T), an asset aimed at resetting the immune system, in autoimmune diseases. We are exploring zola-cel's potential in multiple disease areas, including SLE, SSc and other indications. Additionally, in immunology, we are developing admilparant, our LPA1 antagonist targeting pulmonary fibrosis with ongoing registrational clinical trials for IPF and PPF. In cardiovascular diseases, the LIBREXIA clinical program, in partnership with Johnson & Johnson, includes registrational trials in atrial fibrillation and secondary stroke prevention for milvexian. Lastly, we have a growing, diverse neuroscience pipeline that includes several ongoing Phase III studies as well as several investigational programs aimed at advancing novel therapeutic approaches across neurological diseases.
We are driving commercial execution in our key first-in-class and/or best-in-class marketed products, where we continue to expand and see potential for further expansion into the future. We have established a strong foundation in IO with Opdivo , Yervoy and Opdualag, and have expanded our leadership in the area with the addition of Opdivo Qvantig . In hematology, Reblozyl, continues to drive market share in the first line RS-positive and RS-negative settings in the U.S., and in cardiovascular diseases, Camzyos continues to provide benefits to patients with oHCM. Additionally, in cell therapy, we continue to expand the range of B-cell malignancies treated by Breyanzi . Finally, in immunology and neuroscience, respectively, registrational studies are ongoing for Sotyktu in systemic lupus erythematosus and Sjögren's disease and are ongoing or planned for Cobenfy in Alzheimer's Disease Psychosis, Alzheimer's Disease Agitation, Alzheimer's Disease Cognition, Bipolar I Disorder and Autism spectrum disorder irritability. Together with our digital capabilities, including the deployment of artificial intelligence, we are enhancing commercial productivity through more effective clinician engagement and targeted patient outreach.
We remain committed to the strategic allocation of resources and investing in areas that maximize value and drive sustainable growth. We previously announced a strategic productivity initiative to accelerate the delivery of medicines to patients by evolving and streamlining our enterprise operating model in key areas such as R&D, manufacturing, commercial and other functions. We continue to expect to realize approximately $2.0 billion in cost savings by the end of 2027 in connection with the 2025 expansion of our ongoing strategic productivity initiative. The exit costs resulting from these actions are included in our updated 2023 Restructuring Plan.
Our strategy extends well beyond the discovery, development and delivery of transformative medicines that help patients prevail over serious diseases. We understand the future of our employees, our communities, our planet, and our business are inextricably linked. Accordingly, we seek to mobilize our capabilities and resources to positively impact the communities where we live, work, and serve around the world. As we work to transform patients’ lives through science, we operate with effective governance, uncompromising quality and compliance, and the highest ethical standards to deliver our mission. These values have been central to who we are, what we do, and how we do it since our company was founded in 1887. We believe that driving long-term business value is at the heart of living our purpose, enabling us to be leaders and difference-makers for generations to come.
45Acquisitions, Divestitures, Licensing and Other ArrangementsFor detailed information on significant acquisitions, divestitures, collaborations, licensing and other arrangements during 2025 refer to “Item 8. Financial Statements and Supplementary Data —Note 3. Alliances” and “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements.”RESULTS OF OPERATIONS
Regional Revenues
The composition of the changes in revenues was as follows:
Year Ended December 31,Dollars in millions 2025 2024 % Change Foreign Exchange (b)
United States $ 33,279 $ 34,105 (2) % —
International
13,828 13,199 5 % 2 %
Other revenues (a)
1,087 996 9 % —
Total Revenues
$ 48,194 $ 48,300 — % 1 %
(a) Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations, including royalties received from Merck on Winrevair *.(b) Foreign exchange impacts were derived by applying the prior period average currency rates to the current period revenues.
United States• U.S. revenues decreased 2% in 2025 reflecting higher demand across the Growth Portfolio and for Eliquis , partially offset by the impact of generics on Revlimid, Sprycel and Abraxane. Additionally, U.S. revenues were impacted by higher government channel rebates in 2025. Average net selling prices decreased by 4% in 2025 compared to 2024.International• International revenues increased 5% in 2025 primarily due to higher demand across the Growth Portfolio and for Eliquis , partially offset by generic erosion within the remainder of the Legacy Portfolio. Excluding the impacts of foreign exchange, international revenues increased 3%.
No single country outside the U.S. contributed more than 10% of total revenues in 2025 and 2024. Our business is typically not seasonal; however, in the first quarter we typically see an unwinding of sales channel inventory build-up from the fourth quarter of the prior year.GTN Adjustments
We recognize revenue net of GTN adjustments that are further described in “—Critical Accounting Policies.”
The activities and ending reserve balances for each significant category of GTN adjustments were as follows:
Dollars in millions Charge-Backs and Cash Discounts Medicaid and Medicare Rebates Other Rebates, Returns, Discounts and Adjustments TotalBalance at January 1, 2025 $ 900 $ 5,385 $ 3,636 $ 9,921Provision related to sales made in:Current period 14,069 18,351 9,394 41,814
Prior period (2) (342) (141) (485)
Payments and returns (13,251) (18,752) (8,951) (40,954)
Foreign currency translation and other 4 — 264 268
Balance at December 31, 2025 $ 1,720 $ 4,643 $ 4,202 $ 10,565
46The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as follows:Year Ended December 31,
Dollars in millions 2025 2024 % Change
Gross product sales $ 88,085 $ 83,671 5 %GTN AdjustmentsCharge-backs and cash discounts (14,067) (11,510) 22 %
Medicaid and Medicare rebates (18,010) (16,551) 9 %
Other rebates, returns, discounts and adjustments (9,253) (8,832) 5 %
Total GTN Adjustments (41,329) (36,893) 12 %
Net product sales $ 46,756 $ 46,778 — %
GTN adjustments percentage 47 % 44 % 3 %
U.S. 53 % 49 % 4 %
Non-U.S. 19 % 20 % (1) %
Reductions/(increases) to provisions for product sales made in prior periods resulting from changes in estimates were $485 million for 2025 and $159 million for 2024. The reductions to provisions in 2025 primarily related to lower than expected Medicaid utilization, and the reductions to provisions in 2024 primarily related to the non-U.S. revisions in clawback amounts driven by VAT recoverable estimates. 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 the redesign of the U.S. Medicare Part D program and higher government channel mix, which has higher GTN adjustment percentages.
47
Total Revenues by Product:Year Ended December 31,Dollars in millions 2025 2024 % Change
Growth Portfolio
Opdivo $ 10,049 $ 9,304 8 %
U.S. 5,904 5,350 10 %
Non-U.S. 4,145 3,954 5 %
Opdivo Qvantig
238 — N/A
U.S. 205 — N/A
Non-U.S. 33 — N/A
Orencia 3,705 3,682 1 %
U.S. 2,736 2,770 (1) %
Non-U.S. 969 912 6 %
Yervoy 2,900 2,530 15 %
U.S. 1,825 1,599 14 %
Non-U.S. 1,075 931 15 %
Reblozyl 2,327 1,773 31 %
U.S. 1,888 1,444 31 %
Non-U.S. 438 329 33 %
Breyanzi 1,358 747 82 %
U.S. 994 591 68 %
Non-U.S. 364 156 132 %
Opdualag 1,185 928 28 %
U.S. 1,045 870 20 %
Non-U.S. 140 58 139 %
Camzyos 1,068 602 77 %
U.S. 863 543 59 %
Non-U.S. 204 59 >200%
Zeposia 577 566 2 %
U.S. 392 403 (3) %
Non-U.S. 186 163 14 %
Abecma 427 406 5 %
U.S. 208 242 (14) %
Non-U.S. 219 164 34 %
Sotyktu 291 246 19 %
U.S. 182 190 (5) %
Non-U.S. 110 56 99 %
Krazati 205 126 62 %
U.S. 192 118 63 %
Non-U.S. 13 8 60 %
Cobenfy 155 10 >200%
U.S. 155 10 >200%Non-U.S. — — N/A48Year Ended December 31,Dollars in millions 2025 2024 % Change
Growth Portfolio (cont.)
Other Growth Products (a)
1,924 1,643 17 %
U.S. 782 710 10 %
Non-U.S. 1,142 933 22 %
Total Growth Portfolio
$ 26,409 $ 22,563 17 %
U.S. 17,371 14,840 17 %
Non-U.S. 9,038 7,723 17 %
Legacy Portfolio
Eliquis $ 14,443 $ 13,333 8 %
U.S. 10,239 9,631 6 %
Non-U.S. 4,205 3,702 14 %
Revlimid 2,951 5,773 (49) %
U.S. 2,535 4,999 (49) %
Non-U.S. 416 774 (46) %
Pomalyst/Imnovid 2,733 3,545 (23) %
U.S. 2,341 2,695 (13) %
Non-U.S. 391 850 (54) %
Sprycel 493 1,286 (62) %
U.S. 299 983 (70) %
Non-U.S. 194 303 (36) %
Abraxane 368 875 (58) %
U.S. 116 541 (78) %
Non-U.S. 251 334 (25) %
Other Legacy Products (b)
798 925 (14) %
U.S. 378 416 (9) %
Non-U.S. 420 509 (17) %
Total Legacy Portfolio $ 21,785 $ 25,737 (15) %
U.S. 15,908 19,265 (17) %
Non-U.S. 5,877 6,472 (9) %
Total Revenues $ 48,194 $ 48,300 — %
U.S. 33,279 34,105 (2) %
Non-U.S. (c)
14,915 14,195 5 %
(a) Includes Augtyro, Onureg , Inrebic , Nulojix , Empliciti and royalty revenues, including royalties received from Merck on Winrevair *.
(b) Includes other mature brands.
(c) Includes international and other.
49
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, HCC and various gastric and esophageal cancers.
• U.S. revenues increased 10% in 2025, primarily due to higher demand and higher average net selling prices.
• International revenues increased 5% in 2025, primarily due to higher demand for additional indication launches and foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 4%.
Opdivo Qvantig (nivolumab and hyaluronidase-nvhy) — a subcutaneously administered PD-1 inhibitor indicated for most previously approved adult, solid tumor Opdivo indications as monotherapy, monotherapy maintenance following completion of Opdivo plus Yervoy combination therapy, or in combination with chemotherapy or cabozantinib. Opdivo Qvantig was launched in the U.S. and Puerto Rico in January 2025. Additionally, in May 2025, the product was approved by the EC.
Orencia (abatacept) — a fusion protein indicated for (i) the treatment of adult patients with moderately to severely active RA, (ii) the treatment of patients 2 years of age and older with moderately to severely active polyarticular JIA, (iii) the treatment of patients 2 years of age and older with active PsA and (iv) the prophylaxis of aGVHD, in combination with a calcineurin inhibitor and methotrexate in certain adult and pediatric patients.
• U.S. revenues decreased 1% in 2025, primarily due to lower average net selling prices, partially offset by higher demand.
• International revenues increased 6% in 2025, primarily due to higher demand and foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 5%.• BMS is not aware of any Orencia biosimilars on the market in the U.S., EU or 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, HCC and esophageal cancer.
• U.S. revenues increased 14% in 2025, primarily due to higher demand and higher average net selling prices.
• International revenues increased 15% in 2025, primarily due to higher demand and foreign exchange impacts of 2%. Excluding foreign exchange impacts, revenues increased 14%.
• BMS is not aware of a Yervoy biosimilar on the market in the U.S., EU, or Japan.
Reblozyl (luspatercept-aamt) — an erythroid maturation agent indicated for the treatment of anemia in (i) adult patients with transfusion dependent and non-transfusion dependent beta thalassemia who require regular red blood cell transfusions, (ii) adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require red blood cell transfusions, as well as (iii) adult patients without previous erythropoiesis stimulating agent use (ESA-naïve) with very low- to intermediate-risk MDS who may require regular red blood cell transfusions, regardless of RS status. Reblozyl is the subject of a global licensing agreement pursuant to which we pay tiered royalties to Merck ranging from 20% to 24% of net sales, which are included in Cost of products sold. Refer to “Item 8. Financial Statements and Supplementary Data—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for more information.
• U.S. revenues increased 31% in 2025, primarily due to higher demand.
• International revenues increased 33% in 2025, primarily due to higher demand and foreign exchange impacts of 3%. Excluding foreign exchange impacts, revenues increased 30%.
50
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; 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; and relapsed or refractory MZL after at least two prior lines of systemic therapy.
• U.S. revenues increased 68% in 2025, primarily due to higher demand for core indications and additional indication launches.
• International revenues increased 132% in 2025, primarily due to higher demand driven by new indication launches and launches in new markets as well as foreign exchange impacts of 8%. Excluding foreign exchange impacts, revenues increased 124%.
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 20% in 2025, primarily due to higher demand.
Camzyos (mavacamten) — an oral cardiac myosin inhibitor indicated for the treatment of adults with symptomatic oHCM to improve functional capacity and symptoms.
• U.S. revenues increased 59% in 2025, primarily due to higher demand.
• International revenues increased more than 200% in 2025, primarily due to higher demand driven by launches in new markets.
Zeposia (ozanimod) — an oral im munomodulatory drug used to treat relapsing forms of MS, 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 decreased 3% in 2025, primarily due to lower demand.
• International revenues increased 14% in 2025, primarily due to higher demand and foreign exchange impacts of 4%. Excluding foreign exchange impacts, revenues increased 10%.
Abecma (idecabtagene vicleucel) — is 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 14% in 2025, primarily due to lower demand from increased competition in BCMA targeted therapies.
• International revenues increased 34% in 2025, primarily due to a one-time favorable GTN adjustment in 2025 and foreign exchange impacts of 4%. Excluding foreign exchange impacts, revenues increased 29%.
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.
• U.S. revenues decreased 5% in 2025, primarily due to lower average net selling prices, partially offset by higher demand.
• International revenues increased 99% in 2025, primarily due to higher demand and foreign exchange impacts of 3%. Excluding foreign exchange impacts, revenues increased 95%.
51
Krazati (adagrasib) — a highly selective and potent oral small-molecule inhibitor of the KRAS G12C mutation, indicated for the treatment of adult patients with KRAS G12C -mutated locally advanced or metastatic NSCLC, as determined by an FDA-approved test, who have received at least one prior systemic therapy and, in combination with cetuximab, for the treatment of adult patients with KRAS G12C -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.
• U.S. revenues increased 63% in 2025, primarily due to higher demand.
Cobenfy (xanomeline and trospium chloride) – an oral combination of xanomeline, a M1/M4 muscarinic agonist, and trospium chloride, a peripheral muscarinic antagonist, indicated for the treatment of schizophrenia in adults. Cobenfy was approved by the FDA in September 2024 and launched in the U.S. in October 2024 and Puerto Rico in January 2025.
Other growth products — includes Augtyro , 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 6% in 2025, primarily due to higher demand.
• International revenues increased 14% in 2025, primarily due to higher demand and foreign exchange impacts of 4%. Excluding foreign exchange impacts, revenues increased 9%.
• 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 20. 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 49% in 2025, primarily due to lower demand driven by generic erosion and lower average net selling prices. Lower average net selling prices were impacted by the redesign of the Medicare Part D program and government channel mix during 2025.
• International revenues decreased 46% in 2025, primarily due to lower demand driven by generic erosion.
• In the U.S., certain third parties have been granted volume-limited licenses to sell generic lenalidomide. Pursuant to these licenses, several generics have entered or are expected to enter the U.S. market with volume-limited quantities of generic lenalidomide. As of January 31, 2026, these licenses are no longer volume-limited. 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 decreased 13% in 2025, primarily due to lower average net selling prices, mainly driven by the redesign of the Medicare Part D program.
• International revenues decreased 54% in 2025, primarily due to lower demand driven by generic erosion.
• Generic pomalidomide products entered the EU market in August 2024 and are expected to enter the U.S. market in March 2026.
52Sprycel (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 decreased 70% in 2025, primarily due to lower demand driven by generic erosion.
• International revenues decreased 36% in 2025, primarily due to lower demand driven by generic erosion and foreign exchange impacts of (1)%. Excluding foreign exchange impact, revenues decreased 35%.
• In the U.S. (September 2024), EU and Japan, generic dasatinib products have entered the market.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 78% in 2025, primarily due to lower demand driven by generic erosion.
Other legacy products — includes other mature brands.Estimated End-User DemandPursuant to the SEC Consent Order described under “—SEC Consent Order”, 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 December 31, 2025, for our U.S. distribution channels, and September 30, 2025, 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 account for approximately 87% of total gross sales of U.S. products for the year ended December 31, 2025. 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 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 for the year ended December 31, 2025 is not available prior to the filing of this 2025 Form 10-K. 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.
53Expenses
Year Ended December 31,Dollar in Millions 2025 2024 % ChangeCost of products sold (a)$ 13,936 $ 13,968 — %
Selling, general and administrative 7,267 8,414 (14) %
Research and development 9,951 11,159 (11) %
Acquired IPRD 3,721 13,373 (72) %
Amortization of acquired intangible assets 3,317 8,872 (63) %
Other (income)/expense, net 674 893 (24) %
Total Expenses $ 38,866 $ 56,679 (31) %(a) Excludes amortization of acquired intangible assets.
Cost of products soldCost of products sold include material, internal labor and overhead costs from our owned manufacturing sites, third-party product supply costs and other supply chain costs managed by our global manufacturing and supply organization. Cost of products sold also includes royalties and profit sharing, foreign currency hedge settlement gains and losses and impairment charges, as well as proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology and other appropriate costs. Cost of products sold excludes amortization from acquired intangible assets.
Cost of products sold was relatively flat, reflecting lower intangible asset impairment charges ($1.3 billion), offset by higher alliance profit sharing and product mix.
Selling, general and administrative
Selling, general and administrative expenses primarily include salary and benefit costs, third-party professional and marketing fees, outsourcing fees, shipping and handling costs, advertising and product promotion costs, as well as proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, and other appropriate costs. Expenses are managed through regional commercialization organizations or global enabling functions such as finance, legal, information technology and human resources. Certain expenses are shared with alliance partners based upon contractual agreements.
Selling, general and administrative expenses decreased by $1.1 billion or 14%, primarily due to cost savings from the Company's ongoing strategic productivity initiative and lower acquisition-related cash settlements of unvested stock awards, partially offset by higher investments in new product launches.Research and developmentResearch and development activities include (i) research, which includes discovery and development of new molecular entities through pre-clinical studies, (ii) drug development, which includes clinical development of potential new products, including expansion of indications for existing products through Phase I, Phase II and Phase III clinical studies and (iii) other related charges including support of manufacturing development of pre-approved products, medical support for marketed products, IPRD impairment charges, acquisition related charges and proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, and other appropriate costs. Certain expenses are shared with alliance partners based upon contractual agreements.
Research and development expense decreased by $1.2 billion or 11%, primarily due to lower IPRD impairment charges, cost savings from the Company's ongoing strategic productivity initiative and lower acquisition-related cash settlements of unvested stock awards.
54Acquired IPRD
Acquired IPRD expenses are comprised of upfront payments, contingent milestone payments in connection with asset acquisitions or in-license arrangements of third-party intellectual property rights, as well as any upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval. Acquired IPRD charges are detailed in the table below.Year Ended December 31,Dollars in millions 2025 2024
Karuna asset acquisition (Note 4) $ — $ 12,122
BioNTech upfront fee (Note 3)
1,500 —
Orbital asset acquisition (Note 4)
1,379 —
Philochem upfront fee (Note 4)
350 —
SystImmune upfront fee and milestone (Note 3)
250 800
BioArctic upfront fee (Note 4) 100 —
Evotec designation and opt-in license fees 113 170
RayzeBio rights buy-out
— 92
Prothena opt-in license fee — 80
Other 29 109
Acquired IPRD $ 3,721 $ 13,373Refer to “Item 8. Financial Statements and Supplementary Data—Note 3. Alliances” and “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for additional information.
Amortization of Acquired Intangible AssetsAmortization of acquired intangible assets decreased by $5.6 billion or 63% primarily due to the lower amortization expense related to Revlimid . The Revlimid acquired marketed product right was fully amortized in the fourth quarter of 2024. Additionally, the Pomalyst acquired marketed product right was fully amortized in the fourth quarter of 2025.Other (income)/expense, netOther (income)/expense, net changed by $219 million as discussed below.Year Ended December 31,Dollars in millions 2025 2024
Interest expense $ 1,891 $ 1,947
Royalty income - divestitures (1,129) (1,104)
Royalty and licensing income (1,093) (736)
Investment income (586) (478)
Provision for restructuring 563 635
Litigation and other settlements 434 84
Loss on debt redemption
356 —
Contingent consideration
351 —
Equity investment (gains)/losses, net
(280) (16)
Integration expenses 147 284
Acquisition expense 9 50
Other 11 227
Other (income)/expense, net $ 674 $ 893
• As part of its diabetes termination agreement with AstraZeneca, BMS received royalty payments based on net sales, which terminated as of December 31, 2025.
• Royalties and licensing income in 2025 includes (i) $85 million of income recognized in connection with the out-license of five early-stage immunology assets to a company that was newly-formed with Bain Capital Life Sciences and (ii) $170 million of income related to the amendment of a pre-existing out-licensing arrangement, which effectively terminates future royalties BMS
55
would have been entitled to earn on international sales. Refer to “Item 8. Financial Statements and Supplementary Data—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for more information.
• Investment income increased in 2025 due to higher cash balances.
• Provision for restructuring includes exit and other costs primarily related to certain restructuring activities including plans discussed further in “Item 8. Financial Statements and Supplementary Data—Note 6. Restructuring.”
• Litigation and other settlements includes amounts related to a pricing, sales and promotional practices dispute and a securities litigation matter in 2025. Refer to "Item 8. Financial Statements and Supplementary Data—Note 20. Legal Proceedings and Contingencies" for more information.
• Loss on debt redemption resulted from the early redemption of $8.7 billion long-term debt obligations in 2025. Refer to "Item 8. Financial Statements and Supplementary Data—Note 10. Financing Arrangements" for more information.
• Contingent consideration in 2025 reflects the change in fair value of the contingent value rights associated with the Mirati acquisition. Refer to "Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements" for more information.
• Equity investments generated higher gains in 2025, primarily driven by fair value adjustments for investments that have readily determinable fair value. Refer to "Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements" for more information.
• Integration expenses include initiatives to realize expected cost synergies from acquisitions. Refer to "Item 8. Financial Statements and Supplementary Data—Note 6. Restructuring" for more information.
• Other in 2024 includes pension settlement charges of $119 million, related to the termination of the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income pension plan.Income Taxes
Year Ended December 31,Dollars in millions 2025 2024
Earnings/(Loss) before income taxes $ 9,328 $ (8,379)
Income tax provision
2,272 554
Effective tax rate
24.4 % (6.6) %
Impact of specified items
(5.6) % 63.4 %
Effective tax rate excluding specified items
18.8 % 56.8 %
In July 2025, the U.S. enacted into law new tax legislation, the OBBBA, which among other measures, makes permanent many provisions of the TCJA and modifies certain rules, including within the international tax framework. The OBBBA permits businesses to immediately deduct up to 100% of their qualifying domestic R&D expenses in the year they are incurred for tax years beginning after December 31, 2024, and allows businesses to accelerate deductions (over a one- or two-year period) of domestic R&D expenses that were deferred from 2022 to 2024. The tax impacts from the OBBBA are reflected in the Company's income tax provision for 2025 and in the tax asset and liability balances recorded as of December 31, 2025.
The effective tax rate for 2025 was primarily impacted by a $1.4 billion one-time, non-tax deductible charge for the acquisition of Orbital Therapeutics and jurisdictional earnings mix. Additionally, the effective tax rate includes the impacts of (i) the release of approximately $300 million of income tax reserves related to the lapse of statute for the U.S. federal years 2019-2020, offset by (ii) the addition of income tax reserves for certain transfer pricing ($160 million) and other matters. Excluding the impact of specified items, the effective tax rate was impacted by the aforementioned Orbital Therapeutics acquisition, jurisdictional earnings mix and reserve release for the U.S. federal years 2019-2020.
The effective tax rate for 2024 was primarily impacted by (i) a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna, (ii) jurisdictional earnings mix, including amortization of acquired intangible assets, (iii) impacts of impairments of intangible assets, and (iv) a release of income tax reserves of $644 million related to the resolution of Celgene's 2017-2019 IRS audit. Excluding the impact of specified items, the effective tax rate was impacted by the aforementioned Karuna non-tax deductible charge and jurisdictional earnings mix.
Refer to “Item 8. Financial Statements and Supplementary Data—Note 7. Income Taxes” for additional information.
56Non-GAAP Financial MeasuresOur 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) unwinding 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) divestiture gains or losses, (vii) stock compensation resulting from acquisition-related equity awards, (viii) pension, legal and other contractual settlement charges, (ix) equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnerships and other investments), (x) loss on debt redemptions, and (xi) 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, as well as certain other significant tax items are also excluded such as the 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 financial measures to the most comparable GAAP measures are included in Exhibit 99.1 to our Form 8-K filed on February 5, 2026 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.
57Specified items were as follows:
Year Ended December 31,Dollars in millions 2025 2024
Inventory purchase price accounting adjustments $ 51 $ 47
Intangible asset impairment 564 1,839
Site exit and other costs 127 133
Cost of products sold 742 2,019
Acquisition related charges (a)
75 372
Site exit and other costs 43 50
Selling, general and administrative 118 422
IPRD impairments 385 980
Acquisition related charges (a)
18 348
Site exit and other costs 56 49
Research and development 459 1,377
Amortization of acquired intangible assets 3,317 8,872
Interest expense
(68) (49)
Provision for restructuring 563 635
Litigation and other settlements 432 61
Loss on debt redemption
356 —
Contingent consideration
351 —
Equity investment (gains)/losses
(283) (18)
Integration expenses 147 284
Acquisition expenses
9 50
Other (18) 182
Other (income)/expense, net 1,488 1,145
Increase to earnings/(loss) before income taxes
6,124 13,835
Income taxes on items above (732) (2,045)
Specified tax charge/(benefit) (b)
99 (502)
Income taxes (633) (2,547)
Increase to net earnings/(loss) attributable to BMS
$ 5,491 $ 11,288
(a) Includes cash settlement of unvested stock awards, and other related costs incurred in connection with the recent acquisitions.
(b) Includes changes to tax reserves during 2025 related to certain matters under IRS audit and the release of tax reserves related to the resolution of the Celgene 2017-2019 IRS audit in 2024.
58The reconciliations from GAAP to Non-GAAP were as follows:
Year Ended December 31,Dollars in millions, except per share data 2025 2024
Net earnings/(loss) attributable to BMS
GAAP $ 7,054 $ (8,948)
Specified Items 5,491 11,288
Non-GAAP $ 12,545 $ 2,340
Weighted-average common shares outstanding – diluted – GAAP
2,039 2,027
Incremental shares attributable to share-based compensation plans
— 5
Weighted-average common shares outstanding – diluted – Non-GAAP
2,039 2,032
Diluted earnings/(loss) per share attributable to BMS
GAAP $ 3.46 $ (4.41)
Specified items 2.69 5.56
Non-GAAP $ 6.15 $ 1.15Financial Position, Liquidity and Capital Resources
Our net debt position was as follows:
December 31,Dollars in millions 2025 2024
Cash and cash equivalents $ 10,209 $ 10,346
Marketable debt securities – current 464 513
Marketable debt securities – non-current 396 320
Total cash, cash equivalents and marketable debt securities 11,069 11,179
Short-term debt obligations (2,261) (2,046)
Long-term debt (42,850) (47,603)
Net debt position $ (34,043) $ (38,470)Liquidity and Capital Resources
We regularly assess our anticipated working capital needs, debt and leverage ratio levels, debt maturities, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed, which may lead to the issuance of additional debt securities, the repurchase of debt securities prior to maturity or the issuance or repurchase of common stock.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 for at least the next few years, including dividends, capital expenditures, milestone payments, working capital, income taxes, restructuring initiatives, business development, business combinations, asset acquisitions, repurchase of common stock, and debt maturities of approximately $8.9 billion through 2030, as well as any debt repurchases through redemptions or tender offers. During 2025, our net debt position decreased by $4.4 billion, primarily driven by cash provided by operations of $14.2 billion, partially offset by dividend payments of $5.0 billion and payments for recent acquisitions, collaborations and milestones of $3.9 billion.
In November 2025, BMS Ireland Capital Funding Designated Activity Company, a wholly-owned subsidiary of Bristol-Myers Squibb, completed a registered public offering of €5.0 billion in aggregate principal amount of euro-denominated senior unsecured notes ("2025 Senior Unsecured Notes"), with proceeds, net of loan issuance costs, of $5.7 billion. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Bristol-Myers Squibb. Refer to “Item 8. Financial Statements and Supplementary Data—Note 10. Financing Arrangements” for additional information.
59
In November and December 2025, we repurchased certain debt obligations of $8.7 billion in aggregate principal amount for $9.1 billion of cash in a series of tender offers and "make whole" redemptions. In connection with these transactions, a $356 million loss on debt redemption was recognized based on the carrying value of the debt, which was included in Other (income)/expense, net.
In 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.
Repayment of notes at maturity aggregated approximately $1.9 billion in 2025 and $2.9 billion in 2024.
We have a share repurchase program, authorized by our Board of Directors, allowing for repurchases of BMS common stock shares, effected in the open market or through privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, including through Rule 10b5-1 trading plans. The share repurchase program does not obligate us to repurchase any specific number of shares nor does it have a specific expiration date and may be suspended or discontinued at any time. The remaining share repurchase capacity under the BMS share repurchase program was $5.0 billion as of December 31, 2025. There were no share repurchases in 2025. Refer to “Item 8. Financial Statements and Supplementary Data—Note 17. Equity” for additional information.
Dividend payments were $5.0 billion in 2025 and $4.9 billion in 2024. Dividend paid per common share was $0.62 during each quarter of 2025. Dividends are authorized on a quarterly basis by our Board of Directors.
As of December 31, 2025, we had a five-year $5.0 billion revolving credit facility expiring in January 2030, extendable annually by one year with the consent of the lenders. In January 2026, we extended the credit facility to January 2031. In February 2024, BMS entered into a $2.0 billion 364-day revolving credit facility, which expired in January 2025. The facilities provide for customary terms and conditions with no financial covenants and are used to provide backup liquidity for our commercial paper borrowings. No borrowings were outstanding under the revolving credit facilities as of December 31, 2025 or 2024.
Under our commercial paper program, we may issue a maximum of $5.0 billion of unsecured notes with maturities of not more than 365 days from the date of issuance. The maximum issuance amount was reduced from $7.0 billion as of December 31, 2024 to $5.0 billion in January 2025. During 2024, we issued and repaid $3.0 billion of commercial paper under the program.
Our investment portfolio includes marketable debt securities, which are subject to changes in fair value as a result of interest rate fluctuations and other market factors. Our investment policy establishes limits on the amount and time to maturity of investments with any institution. The policy also requires that investments are only entered into with corporate and financial institutions that meet high credit quality standards. Refer to “Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements” for further information.Capital ExpendituresAnnual capital expenditures were approximately $1.3 billion in 2025, $1.2 billion in 2024 and $1.1 billion in 2023 and are expected to be approximately $1.3 billion in 2026. We continue to make capital expenditures in connection with the expansion of our cell therapy and other manufacturing capabilities, research and development and other facility-related activities. Over the next three years we plan to make certain investments to improve and enable additional U.S. domestic manufacturing capabilities, a portion of which will include capital expenditures.
60Contractual Obligations and Off-Balance Sheet Arrangements
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to debt, income taxes and lease arrangements are provided in “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards”, “—Note 10. Financing Arrangements”, “—Note 7. Income Taxes” and “—Note 14. Leases”, respectively.We are committed to an aggregate $18.3 billion of potential contingent future research and development milestone payments to third parties for in-licensing, asset acquisitions and development programs including early-stage milestones of $9.6 billion (milestones achieved through Phase III clinical studies) and late-stage milestones of $8.7 billion (milestones achieved post Phase III clinical studies). Payments generally are due and payable only upon achievement of certain developmental and regulatory milestones for which the specific timing cannot be predicted. Certain agreements also provide for sales-based milestones aggregating to $21.5 billion that we would be obligated to pay upon achievement of certain sales levels in addition to royalties. We also have certain manufacturing, development and commercialization obligations in connection with alliance arrangements. It is not practicable to estimate the amount of these obligations. Refer to “Item 8. Financial Statements and Supplementary Data—Note 3. Alliances” and "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements" for further information.We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.
Credit RatingsOur current long-term and short-term credit ratings assigned by Moody’s Investors Service are A2 and Prime-1, respectively, with a stable long-term credit outlook. Our current long-term and short-term credit ratings assigned by Standard & Poor’s are A and A-1, respectively, with a stable long-term credit outlook. The long-term ratings reflect the agencies’ opinion that we have a low default risk but are somewhat susceptible to adverse effects of changes in circumstances and economic conditions. The short-term ratings reflect the agencies’ opinion that we have good to extremely strong capacity for timely repayment. Any credit rating downgrade may affect the interest rate of any debt we may incur, the fair market value of existing debt and our ability to access the capital markets generally.Cash Flows
The following is a discussion of cash flow activities:
Year Ended December 31,Dollars in millions 2025 2024Cash flow provided by/(used in):Operating activities $ 14,156 $ 15,190
Investing activities (4,132) (21,352)
Financing activities (10,348) 5,127Operating Activities
Cash flow from operating activities represents the cash receipts and disbursements from all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting net earnings for noncontrolling interest, non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash and when the transactions are recognized in our results of operations. As a result, changes in cash from operating activities reflect the timing of cash collections from customers and alliance partners; payments to suppliers, alliance partners and employees; customer discounts and rebates; and tax payments in the ordinary course of business.The $1.0 billion decrease in cash flow provided by operating activities compared to 2024 was primarily driven by higher GTN payments, partially offset by lower expenses due to the ongoing strategic productivity initiative and lower acquisition-related expenses, including the cash settlement of unvested stock awards.Investing Activities
Cash requirements from investing activities include cash used for acquisitions, manufacturing and facility-related capital expenditures and purchases of marketable securities with original maturities greater than 90 days at the time of purchase, proceeds from business divestitures (including royalties), the sale and maturity of marketable securities, sale of equity investments, as well as upfront and contingent milestones payments from licensing arrangements.61
The $17.2 billion change in cash flow used in investing activities compared to 2024 was due to higher acquisition-related payments of $17.9 billion in 2024, partially offset by lower net proceeds from marketable debt securities and equity investments of $566 million in 2025.Financing Activities
Cash requirements from financing activities include cash used to pay dividends, repurchase common stock and repay long-term debt and other borrowings, as well as proceeds from the exercise of stock options and issuance of long-term debt and other borrowings.The $15.5 billion change in cash provided by/(used in) financing activities compared to 2024 was primarily due to the issuance of long-term debt in 2024 to partially fund the acquisitions of RayzeBio and Karuna and the repurchases of debt in 2025, partially offset by new debt issuances in 2025. Refer to “Item 8. Financial Statements and Supplementary Data —Note 10. Financing Arrangements” for more information.Recently Issued Accounting Standards
For recently issued accounting standards, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards.”
SEC Consent Order
As previously disclosed, on August 4, 2004, we entered into a final settlement with the SEC, concluding an investigation concerning certain wholesaler inventory and accounting matters. The settlement was reached through a Consent, a copy of which was attached as Exhibit 10 to our quarterly report on Form 10-Q for the period ended September 30, 2004.Under the terms of the Consent, we agreed, subject to certain defined exceptions, to limit sales of all products sold to our direct customers (including wholesalers, distributors, hospitals, retail outlets, pharmacies and government purchasers) based on expected demand or on amounts that do not exceed approximately one month of inventory on hand, without making a timely public disclosure of any change in practice. We also agreed in the Consent to certain measures that we have implemented including: (a) establishing a formal review and certification process of our annual and quarterly reports filed with the SEC; (b) establishing a business risk and disclosure group; (c) retaining an outside consultant to comprehensively study and help re-engineer our accounting and financial reporting processes; (d) publicly disclosing any sales incentives offered to direct customers for the purpose of inducing them to purchase products in excess of expected demand; and (e) ensuring that our budget process gives appropriate weight to inputs that come from the bottom to the top, and not just from the top to the bottom, and adequately documenting that process.
We have established a company-wide policy concerning our sales to direct customers for the purpose of complying with the Consent, which includes the adoption of various procedures to monitor and limit sales to direct customers in accordance with the terms of the Consent. These procedures include a governance process to escalate to appropriate management levels potential questions or concerns regarding compliance with the policy and timely resolution of such questions or concerns. In addition, compliance with the policy is monitored on a regular basis.We maintain DSAs with our U.S. pharmaceutical wholesalers and specialty distributors, which account for approximately 97% of our gross U.S. revenues. Under the current terms of the DSAs, our wholesaler customers provide us with weekly information with respect to months on hand product-level inventories and the amount of out-movement of products. The three largest wholesalers currently account for approximately 87% of our gross U.S. revenues. The inventory information received from our wholesalers, together with our internal information, is used to estimate months on hand product level inventories at these wholesalers. We estimate months on hand product inventory levels for our U.S. business’s wholesaler customers other than the three largest wholesalers by extrapolating from the months on hand calculated for the three largest wholesalers. In contrast, our non-U.S. business has significantly more direct customers, limited information on direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information, where available, varies widely. Accordingly, we rely on a variety of methods to estimate months on hand product level inventories for these business units.We believe the above-described procedures provide a reasonable basis to ensure compliance with the Consent.62Critical 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 affect our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because 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.
Revenue Recognition
Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates. Revenue is recognized following a five-step model: (i) identify the customer contract; (ii) identify the contract’s performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation; and (v) recognize revenue when or as a performance obligation is satisfied. Revenue is also reduced for GTN sales adjustments discussed below, all of which involve significant estimates and judgment after considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix (e.g. Medicare or Medicaid), current contract prices under applicable programs, unbilled claims and processing time lags and inventory levels in the distribution channel. Estimates are assessed each period and adjusted as required to revise information or actual experience.
The following categories of GTN adjustments involve significant estimates, judgments and information obtained from external sources. Refer to “Item 8. Financial Statements and Supplementary Data—Note 2. Revenue” for further discussion and analysis of each significant category of GTN sales adjustments.
Charge-backs and cash discounts
Our U.S. business participates in programs with government entities, the most significant of which are the U.S. Department of Defense and the U.S. Department of Veterans Affairs, and other parties, including covered entities under the 340B program, whereby pricing on products is extended below wholesaler list price to participating entities. These entities purchase products through wholesalers at the lower program price and the wholesalers then charge us the difference between their acquisition cost and the lower program price. Accounts receivable is reduced for the estimated amount of unprocessed charge-back claims attributable to a sale (typically within a two to four week time lag).In the U.S. and some other countries, customers are offered cash discounts as an incentive for prompt payment on certain products, approximating 2% of the invoiced sales price. Accounts receivable is reduced for the estimated amount of cash discount at the time of sale and the discount is typically taken by the customer within one month.Medicaid and Medicare rebates
Our U.S. business participates in state government Medicaid programs and other qualifying Federal and state government programs requiring discounts and rebates to participating state and local government entities. All discounts and rebates provided through these programs are included in our Medicaid rebate accrual. Medicaid rebates have also been extended to drugs used in managed Medicaid plans. The estimated amount of unpaid or unbilled rebates is presented as a liability.Rebates and discounts are offered to managed healthcare organizations in the U.S. managing prescription drug programs and Medicare Advantage prescription drug plans covering the Medicare Part D drug benefit. As a result of the redesign of the U.S. Medicare Part D program, beginning in 2025, we paid 10% of costs up to a $2,000 cap for out-of-pocket costs for Medicare beneficiaries and 20% of costs after that cap was reached. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.Other rebates, returns, discounts and adjustments
Other GTN sales adjustments include sales returns and all other programs based on applicable laws and regulations for individual non-U.S. countries as well as rebates offered to managed healthcare organizations in the U.S. to a lesser extent. The non-U.S. programs include several different pricing schemes such as cost caps, volume discounts, outcome-based pricing schemes and pricing claw-backs that are based on sales of individual companies or an aggregation of all companies participating in a specific market. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.63Estimated returns for established products are determined after considering historical experience and other factors including levels of inventory in the distribution channel, estimated shelf life, product recalls, product discontinuances, price changes of competitive products, introductions of generic products, introductions of competitive new products and lower demand following the loss of market exclusivity. Estimated returns for new products are determined after considering historical sales return experience of similar products, such as those within the same product line, similar therapeutic area and/or similar distribution model and estimated levels of inventory in the distribution channel and projected demand. The estimated amount for product returns is presented as a liability.
Use of information from external sources
Information from external sources is used to estimate GTN adjustments. Our estimate of inventory at the wholesalers is based on the projected prescription demand-based sales for our products and historical inventory experience, as well as our analysis of third-party information, including written and oral information obtained from certain wholesalers with respect to their inventory levels and sell-through to customers and third-party market research data, and our internal information. The inventory information received from wholesalers is a product of their recordkeeping process and excludes inventory held by intermediaries to whom they sell, such as retailers and hospitals.
We have also continued the practice of combining retail and mail prescription volume on a retail-equivalent basis. We use this methodology for internal demand forecasts. We also use information from external sources to identify prescription trends, patient demand and average selling prices. Our estimates are subject to inherent limitations of estimates that rely on third-party information, as certain third-party information was itself in the form of estimates, and reflect other limitations including lags between the date as of which third-party information is generated and the date on which we receive third-party information.
Acquisition and Intangible Assets Valuations
We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations. If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets. We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets. If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business.
We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date. Excess of consideration over the fair value of net assets acquired is recorded as goodwill. Estimating fair value requires us to make significant judgments and assumptions.In transactions accounted for as acquisitions of assets, no goodwill is recorded and contingent consideration, such as payments upon achievement of various developmental, regulatory and commercial milestones, generally is not recognized at the acquisition date. In an asset acquisition, upfront payments allocated to IPRD projects at the acquisition date are expensed unless there is an alternative future use. In addition, product development milestones are expensed upon achievement.
We have identifiable intangible assets that are measured at their respective fair values as of the acquisition date. Generally, we engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. The fair value of these assets is estimated using discounted cash flow models. These models required the use of the following significant estimates and assumptions among others:
• Identification of product candidates with sufficient substance requiring separate recognition;
• Estimates of revenues and operating profits related to commercial products or product candidates;
• Eligible patients, pricing and market share used in estimating future revenues;
• Probability of success for unapproved product candidates and additional indications for commercial products;
• Resources required to complete the development and approval of product candidates;
• Timing of regulatory approvals and exclusivity;
• Appropriate discount rate by products;
• Market participant income tax rates; and
• Allocation of expected synergies to products.
We believe the fair value used to record intangible assets acquired are based upon reasonable estimates and assumptions considering the facts and circumstances as of the acquisition date.64
Impairment and Amortization of Long-lived Assets, including Goodwill and Other Intangible Assets
Long-lived assets include intangible assets and property, plant and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable or at least annually for Goodwill and IPRD. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products or IPRD. These assets are initially measured at fair value and therefore any reduction in expectations used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include changes in competitive landscape, earlier than expected loss of market exclusivity, pricing reductions, adverse regulatory changes or clinical study results, delay or failure to obtain regulatory approval for initial or follow on indications and unanticipated development costs, inability to achieve expected synergies resulting from cost savings and avoidance, higher operating costs, changes in tax laws and other macro-economic changes. The complexity in estimating the fair value of intangible assets in connection with an impairment test is similar to the initial valuation. If the carrying value of long-lived assets exceeds its fair value, then the asset is written-down to its fair value. Expectations of future cash flows are subject to change based upon the near and long-term production volumes and margins generated by the asset as well as any potential alternative future use. The estimated useful lives of long-lived assets are subjective and require significant judgment regarding patent lives, future plans and external market factors. Long-lived assets are also periodically reviewed for changes in facts or circumstances resulting in a reduction to the estimated useful life of the asset, requiring the acceleration of depreciation or amortization. Intangible asset impairment charges included in Cost of products sold, Research and development, and Other (income)/expense, net were $949 million in 2025, $2.9 billion in 2024 and $136 million in 2023. Refer to “Item 8. Financial Statements and Supplementary Data—Note 15. Goodwill and Other Intangible Assets” for further discussion and analysis of these impairment charges.Income TaxesValuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including long-range forecasts of future taxable income and evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. Our deferred tax assets were $8.9 billion at December 31, 2025 (net of valuation allowance of $960 million) and $8.4 billion at December 31, 2024 (net of valuation allowance of $929 million).
The U.S. federal net operating loss carryforwards were $1.3 billion at December 31, 2025. These carryforwards were acquired as a result of certain acquisitions and while they generally have unlimited lives, they are subject to limitations under Section 382 of the Internal Revenue Code. Foreign and state net operating loss carryforwards begin expiring in varying years starting in 2026 (certain amounts have unlimited lives).Liabilities are established for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, transfer pricing matters, tax credits and deductibility of certain expenses. Such liabilities represent a reasonable provision for taxes ultimately expected to be paid and may need to be adjusted over time as more information becomes known.
For discussions on income taxes, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards—Income Taxes” and “—Note 7. Income Taxes.”
Contingencies
In the normal course of business, we are subject to contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, contractual claims and tax matters. We recognize accruals for such contingencies when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. These estimates are subject to uncertainties that are difficult to predict and, as such, actual results could vary from these estimates.
For discussions on contingencies, refer to “Item 8. Financial Statements and Supplementary Data—Note 1. Accounting Policies and Recently Issued Accounting Standards—Contingencies,” “—Note 7. Income Taxes” and “—Note 20. Legal Proceedings and Contingencies.”65Product and Pipeline DevelopmentsOur 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 development programs could potentially have an impact on our revenue and earnings within the next few years if regulatory approvals are obtained and products are successfully commercialized. The following are the late-stage new indication developments in our marketed products, as well as developments in our late-stage pipeline:Product Indication Date DevelopmentsAbecma & Breyanzi
Multiple Indications
June 2025 Announced FDA approval of label updates to reduce certain patient monitoring requirements and remove the REMS programs that had been in place since each product was initially approved.
Augtyro
NSCLC and Solid Tumor
February 2025 Announced EC approval of Augtyro as a treatment for ROS1 TKI-naïve and –pre-treated adult patients with ROS1-positive advanced NSCLC and for the treatment of adult and pediatric patients 12 years of age and older with advanced solid tumors expressing a NTRK gene fusion, and who have received a prior NTRK inhibitor, or have not received a prior NTRK inhibitor and treatment options not targeting NTRK provided limited clinical benefit, or have been exhausted. The approval is based on results from the TRIDENT-1 and CARE trials.
NTRK Solid Tumors November 2025 Announced that Japan’s Ministry of Health, Labour and Welfare approved the supplemental Japanese New Drug Application for Augtyro for the treatment of NTRK fusion-positive, advanced or recurrent solid tumors. This approval is based on the results from the global Phase I/II TRIDENT-1 study and Japan Phase I/II CARE pediatric study.
Breyanzi
FL
March 2025 Announced EC approval of Breyanzi for the treatment of adult patients with relapsed or refractory FL after two or more lines of systemic therapy. This approval is based on results from the global, Phase II TRANSCEND FL study, the largest clinical trial to date to evaluate a CAR-T cell therapy in patients with relapsed or refractory indolent NHL, including FL.
MCL
November 2025 Announced EC approval for Breyanzi for the treatment of adult patients with relapsed or refractory MCL after at least two lines of systemic therapy including a Bruton's tyrosine kinase (BTK) inhibitor. This approval is based on results from the MCL cohort of TRANSCEND NHL 001, in which Breyanzi demonstrated a high overall response rate of 82.7% and complete response rate of 71.6%, the study's primary and key secondary endpoints, respectively.
MZL
December 2025 Announced FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory MZL who have received at least two prior lines of systemic therapy. This approval of Breyanzi is based on results from the MZL cohort in the Phase II TRANSCEND FL study.
MCL & MZL
July 2025 The supplemental Japanese New Drug Application for Breyanzi was submitted to Japan's Pharmaceuticals and Medical Devices Agency for the treatment of both relapsed or refractory MCL and relapsed or refractory MZL. This submission is based on Cohort 4 of the Phase II TRANSCEND FL study and the MCL cohort of the Phase I TRANSCEND NHL study.66
Product Indication Date DevelopmentsCamzyos nHCM
April 2025 Announced that the Phase III ODYSSEY-HCM trial evaluating Camzyos for the treatment of adult patients with symptomatic New York Heart Association class II-III nHCM did not meet its dual primary endpoints.
oHCM
January 2026 Announced positive topline results from SCOUT-HCM, a Phase III trial evaluating Camzyos in the first study of a cardiac myosin inhibitor (CMI) in adolescents (ages 12 years to <18 years) with symptomatic oHCM. The trial met its primary endpoint, demonstrating a statistically significant reduction from baseline in Valsalva left ventricular outflow tract (LVOT) gradient at Week 28 versus placebo, indicating Camzyos was effective in improving LVOT obstruction. Statistical significance was also met for multiple secondary endpoints, including those for clinically meaningful aspects of the disease. Safety results in the trial were consistent with the established safety profile of Camzyos in adults, and no new safety signals were reported in this new, younger population. The study continues with active treatment and long-term extension periods.
August 2025 Presented results from COLLIGO-HCM, a global retrospective real-world data study, at the European Society of Cardiology Congress 2025. The analysis showed that Camzyos was associated with reductions in left ventricular outflow tract (LVOT) obstruction and improvements in symptom burden in a racially diverse population of patients with symptomatic oHCM treated in an international, real-world setting. The effectiveness and safety demonstrated in COLLIGO-HCM are consistent with results from randomized, controlled clinical trials and further support the growing body of evidence for Camzyos , the first and only approved cardiac myosin inhibitor, as a standard of care for New York Heart Association (NYHA) class II-III symptomatic oHCM.
April 2025 Announced that the FDA updated the U.S. Prescribing Information for Camzyos , simplifying treatment for patients and physicians by reducing the required echo monitoring for eligible patients in the maintenance phase and expanding patient eligibility by reducing contraindications.
March 2025 Announced that Japan’s Ministry of Health, Labour and Welfare granted manufacturing and marketing approval for Camzyos for the treatment of adults with oHCM. This approval is based on results from the global Phase III EXPLORER-HCM study and the Japan Phase III HORIZON-HCM study.
February 2025 In EU, following an opinion from the CHMP of the EMA, Camzyos received a label update to reduce the frequency of required echocardiography monitoring once a patient treated for oHCM is on a stable dose.
Cobenfy
AD Psychosis
December 2025 Announced that additional patients will be enrolled in the Phase III ADEPT-2 study evaluating Cobenfy in psychosis associated with Alzheimer's Disease. As part of our commitment to upholding the highest standards in clinical research and following a thorough blinded review of the ADEPT-2 study data, we identified irregularities due to clinical trial execution at a small number of study sites. With these findings, prior to database lock, BMS made the decision to exclude patient data from those sites from the primary analysis. Following consultation and agreement with the FDA, an interim data analysis for efficacy and safety was conducted by an independent party and reviewed by the Data Monitoring Committee. Following this analysis, the DMC recommended the study continue by enrolling additional patients to the original target study population. Based on this recommendation, BMS will continue patient enrollment and advance the program as advised by the DMC. BMS remains blinded to study data.
Schizophrenia
April 2025 Announced that the Phase III ARISE trial evaluating Cobenfy as an adjunctive treatment to atypical antipsychotics in adults with schizophrenia did not meet the threshold for statistical significance for the primary endpoint.
iberdomide
RRMM
September 2025 Announced that the Phase III EXCALIBER-RRMM study evaluating iberdomide combined with standard therapies in patients with RRMM demonstrated a statistically significant improvement in minimal residual disease (MRD) negativity rates, compared with the control arm, in a planned interim analysis of the MRD endpoint. The safety profile of iberdomide in combination with daratumumab and dexamethasone in this study is generally consistent with previous studies.
Inrebic
Myelofibrosis June 2025 Announced that Japan’s Ministry of Health Labour and Welfare granted approval of Inrebic for the treatment of myelofibrosis. This approval is based on results from the global Phase III Jakarta study, the global Phase III Jakarta-2 trial, and the Japan local Phase I/II trial (FEDR-MF-003).67
Product Indication Date Developmentsizalontamab brengitecan
NSCLC
August 2025 Announced, with SystImmune, that the FDA granted Breakthrough Therapy Designation to izalontamab brengitecan (iza-bren) for the treatment of patients with locally advanced or metastatic NSCLC with mutated epidermal growth factor (EGFR) exon 19 deletions or exon 21 L858R substitution mutations whose disease has progressed on or after treatment with an EGFR tyrosine kinase inhibitor (TKI) and platinum-based chemotherapy. The FDA's decision was based on the efficacy and safety data from three ongoing clinical trials: BL-B01D1-101, BL-B01D1-203 and BL-B01D1-LUNG-101.
milvexian
ACS
November 2025 Announced, in collaboration with Johnson & Johnson, the decision to stop the Phase III Librexia ACS trial evaluating the efficacy and safety of milvexian when added to the standard of care (conventional antiplatelet therapy) for patients after a recent ACS event. The decision to discontinue the trial follows a preplanned interim analysis by the Independent Data Monitoring Committee, which determined the trial is unlikely to meet the primary efficacy endpoint. No new safety concerns related to the investigational therapy were identified. The safety profile was consistent with previously reported studies of milvexian. The IDMC recommended that the other two Phase III trials, Librexia AF for patients with atrial fibrillation AF and Librexia STROKE for secondary stroke prevention, continue as planned, with topline data expected in 2026.
obexelimab
IgG4-RD
January 2026 Our partner, Zenas BioPharma, Inc., announced positive results from the Phase III INDIGO trial of obexelimab in Immunoglobulin G4-Related Disease (IgG4-RD). Obexelimab met the primary endpoint, demonstrating a highly statistically significant and clinically meaningful 56% reduction in the risk of IgG4-RD flare compared to placebo during the 52-week randomized placebo-controlled period. Obexelimab also met and demonstrated highly statistically significant activity compared to placebo on all four key secondary endpoints, which were reduction in investigator assessed IgG4-RD flare, the number of flares requiring rescue therapy, the proportion of patients achieving complete remission and the cumulative use of IgG4-RD rescue therapy. Rates of infections, including Grade 3, were lower in the obexelimab arm compared to placebo, and the incidence of injection site reactions was similar across both study arms.
Onureg
AML
November 2025 The Japanese New Drug Application was submitted to Japan's Pharmaceuticals and Medical Devices Agency for Onureg for maintenance therapy of AML after remission induction therapy. This filing was based on results from the global Phase III QUAZAR (CC-486-AML-001) study and the Japan Phase II CA055005 study.
Opdivo
cHL
December 2025 Announced that the FDA accepted and granted priority review to the sBLA for Opdivo in combination with doxorubicin, vinblastine and dacarbazine (AVD) for adult and pediatric (12 years and older) patients with previously untreated Stage III or IV classical Hodgkin Lymphoma. The FDA filing acceptance is based on the Phase III CA2098UT study. The FDA assigned a PDUFA goal date of April 8, 2026.
In addition, the EMA validated the Type II variation application for Opdivo plus doxorubicin, vinblastine and dacarbazine for adults and adolescents (12 years of age and older) with previously untreated Stage III or IV cHL. Validation confirms the submission is complete and begins the EMA's centralized review procedure.
NSCLC
May 2025 Announced EC approval of Opdivo, in combination with platinum-based chemotherapy as neoadjuvant treatment, followed by Opdivo as monotherapy as adjuvant treatment after surgical resection for the treatment of resectable NSCLC at high risk of recurrence in adult patients whose tumors have PD-L1 expression ≥1%. This approval is based on the results from the CheckMate -77T study, in which the trial met its primary endpoint of event-free survival and showed clinically meaningful improvements in the secondary efficacy endpoints of pathologic complete response and major pathologic response.
February 2025 Announced that the final analysis of overall survival from the Phase III CheckMate -816 study evaluating Opdivo in combination with platinum-doublet chemotherapy as a neoadjuvant treatment for adult patients with resectable NSCLC. The results showed a statistically significant and clinically meaningful improvement in the key secondary endpoint of overall survival compared to neoadjuvant chemotherapy alone.68Product Indication Date Developments
Opdivo Qvantig
Multiple Indications
May 2025 Announced EC approval of Opdivo Qvantig injection for subcutaneous use, in most previously approved adult, solid tumor Opdivo indications as monotherapy, monotherapy maintenance following completion of Opdivo + Yervoy combination therapy, or in combination with chemotherapy or cabozantinib. This approval is based primarily on results from the Phase III CheckMate -67T trial which demonstrated noninferiority in the co-primary endpoints of Cavgd28 (time-averaged Opdivo serum concentration over 28 days) and Cminss (trough serum concentration at steady state) and consistent efficacy in the secondary endpoint of ORR for the subcutaneous formulation of Opdivo vs. its intravenous formulation.
Opdivo + Yervoy CRC
August 2025 Announced that Japan’s Ministry of Health Labour and Welfare approved Opdivo + Yervoy for the treatment of unresectable advanced or recurrent microsatellite instability-high colorectal cancer. This approval is based on the results from the Phase III CheckMate-8HW study.
April 2025 Announced FDA approval of Opdivo + Yervoy as a first-line treatment of adult and pediatric patients 12 years and older with unresectable or metastatic microsatellite instability-high or mismatch repair deficient CRC. This approval is based on the Phase III CheckMate -8HW trial. This approval, granted more than two months ahead of the June 23, 2025 PDUFA goal date, follows the FDA's prior decision to grant the application Breakthrough Therapy Designation and Priority Review status.
HCC
June 2025 Announced that Japan’s Ministry of Health Labour and Welfare granted approval of Opdivo + Yervoy for the treatment of unresectable HCC. This approval is based on the results from the global Phase III CheckMate -9DW trial.
April 2025 Announced FDA approval of Opdivo + Yervoy as a first-line treatment for adult patients with unresectable or metastatic HCC. This approval is based on the results from the global Phase III CheckMate -9DW trial.
March 2025 Announced EC approval of Opdivo + Yervoy for the first-line treatment of adult patients with unresectable or advanced HCC. The approval is based on results from the CheckMate -9DW study, in which the dual immunotherapy treatment led to a statistically significant and clinically meaningful improvement in overall survival, the clinical trial's primary endpoint.
Opdualag Melanoma February 2025 Announced that the Phase III RELATIVITY-098 trial evaluating Opdualag for the adjuvant treatment of patients with completely resected stage III-IV melanoma did not meet its primary endpoint of recurrence-free survival. The safety profile of Opdualag observed in this analysis was consistent with the known profiles of nivolumab and relatlimab.
Reblozyl
MF-Associated Anemia
July 2025 Announced that the Phase III INDEPENDENCE trial evaluating Reblozyl with concomitant janus kinase inhibitor therapy in adult patients with myelofibrosis-associated anemia receiving red blood cell (RBC) transfusion did not meet its primary endpoint of RBC transfusion independence.
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Product Indication Date Developments
Sotyktu
Plaque Psoriasis February 2025 Announced new five-year results from the POETYK PSO long-term extension trial of Sotyktu treatment in adult patients with moderate-to-severe plaque psoriasis, in which the safety profile of Sotyktu remained consistent through five years with more than 5,000 patient-years of exposure in the trial, with no new safety signals identified. In patients who were treated continuously with Sotyktu , clinical response rates were maintained from Year 1 to Year 5, including Psoriasis Area and Severity Index (PASI) 75, PASI 90 and static Physician’s Global Assessment (sPGA) 0/1 (clear/almost clear).
PsA October 2025 Announced that the Phase III POETYK PsA-1 trial further confirmed the efficacy and safety of Sotyktu in adults with active PsA who were not previously treated with a biologic disease-modifying antirheumatic drug. The trial demonstrated that Sotyktu improved and maintained meaningful clinical responses, inhibition of radiographic progression and patient-reported outcomes through Week 52 in adults with active PsA.
July 2025 The FDA accepted for review the supplemental New Drug Application (sNDA) for Sotyktu for the treatment of adults with active psoriatic arthritis. The FDA assigned PDUFA goal date of March 6, 2026.
In addition, China's Center for Drug Evaluation of National Medical Products Administration and Japan's Ministry of Health, Labour and Welfare accepted sNDAs for Sotyktu in the same indication. The EMA has also validated the Type II variation application to expand the indication for Sotyktu to include this disease. The regulatory applications are based on the pivotal POETYK PsA-1 and POETYK PsA-2 trials.
June 2025 Announced positive data from the pivotal Phase III POETYK PsA-1 trial evaluating the efficacy and safety of Sotyktu in adults with active PsA. The trial met its primary endpoint, with a significantly greater proportion of Sotyktu -treated patients achieving ACR20 response (at least a 20 percent improvement in signs and symptoms of disease) after 16 weeks of treatment compared with placebo (54.2% versus 34.1%, respectively). Additionally, treatment with Sotyktu met important secondary endpoints across PsA disease activity at Week 16, demonstrating improvement across clinical measures, extra-articular manifestations and patient-reported outcomes. The overall safety profile of Sotyktu through 16 weeks of treatment was consistent with what has been reported throughout the clinical trial programs for Sotyktu , including the Phase III POETYK PsA-2 and the Phase III moderate-to-severe plaque psoriasis clinical trials.
June 2025 The supplemental Japanese New Drug Application for Sotyktu was submitted to Japan's Pharmaceuticals and Medical Devices Agency for the treatment of adults with active PsA. This filing includes 16-week efficacy/safety data from the Phase III PsA-1 trial and 52-week efficacy/safety data from the Phase III PsA-2 trial.
March 2025 Announced positive data from the pivotal Phase III POETYK PsA-2 trial evaluating the efficacy and safety of Sotyktu in adults with active PsA. The trial met its primary endpoint, with a significantly greater proportion of Sotyktu -treated patients achieving ACR20 response (at least a 20 percent improvement in signs and symptoms of disease) after 16 weeks of treatment compared with placebo (54.2% versus 39.4%, respectively). Additionally, treatment with Sotyktu met important secondary endpoints across PsA disease activity at Week 16, demonstrating improvement across clinical signs and symptoms, extra-articular manifestations and patient-reported outcomes. The overall safety profile of Sotyktu through 16 weeks of treatment was consistent with that established in a Phase II PsA clinical trial and Phase III moderate-to-severe plaque psoriasis clinical trials.
70Special Note Regarding Forward-Looking StatementsThis 2025 Form 10-K (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, laws, agreements and regulations to lower drug prices, government actions relating to the imposition of new tariffs, 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. We have included important factors in the cautionary statements included in this 2025 Form 10-K, particularly under “Item 1A. Risk 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 2025 Form 10-K 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 2025 Form 10-K.