Excellent Performance Highlights Second Quarter for Bristol-Myers Squibb

Bristol-Myers Squibb Company (NYSE:BMY) today reported sales and earnings growth for the second quarter 2009.

"The excellent results for the second quarter and first six months of the year clearly represent how Bristol-Myers Squibb is rapidly transforming into a next-generation BioPharma leader through robust science, superior operational performance and disciplined financial management,” said James M. Cornelius, chairman and chief executive officer. "We are well on-track to continue delivering on our growth commitments. In the second quarter, we extended our collaboration with Otsuka on ABILIFY and, as a result, we expect that our outlook for 2013 is much improved. Our business performance and financial strength position us well to invest in further opportunities for long-term growth.

"Nowhere is that more evident than with our planned acquisition of Medarex. This is yet another example of how we are successfully executing on our String of Pearls strategy and building our future pipeline. We are expanding our biologics capabilities and gaining access to exciting new technology which may open new frontiers in cancer research. We believe the assets from Medarex can give us a competitive advantage in immunology and oncology, two areas of significant unmet medical need.”

SECOND QUARTER FINANCIAL RESULTS

• Bristol-Myers Squibb posted second quarter 2009 net sales from continuing operations of $5.4 billion, an increase of 3%, or 8% excluding foreign exchange impact, compared to the same period in 2008.
• Gross profit improved to 72.9% of net sales in the second quarter 2009 compared to 67.9% in 2008. The improvement was mostly driven by higher manufacturing rationalization charges in 2008, favorable foreign exchange impact, cost improvements, favorable product mix and price increases.
• Marketing, selling and administrative expenses decreased by 8%, or 2% excluding foreign exchange impact, to $1.1 billion in the second quarter of 2009 compared to the same period in 2008, primarily due to a continued reduction in general and administrative expenses.
• Advertising and product promotion spending decreased by 5%, or was flat excluding foreign exchange impact, to $400 million in the second quarter of 2009 compared to 2008.
• Research and development expenses remained flat, or increased 3% excluding foreign exchange impact, to $829 million in the second quarter of 2009 compared to the same period in 2008.
• The effective tax rate on earnings from continuing operations was 25.4% for the second quarter.
• The company reported second quarter net earnings from continuing operations attributable to Bristol-Myers Squibb Company of $983 million or $0.49 per diluted share, compared to $722 million or $0.36 per diluted share for the same period in 2008.
• The company reported second quarter non-GAAP net earnings from continuing operations attributable to Bristol-Myers Squibb Company of $1,109 million or $0.56 per diluted share, compared to $861 million or $0.43 per diluted share for the same period in 2008. An overview of specified items is discussed under "Use of Non-GAAP Financial Information.”
• The company increased its net cash position by nearly $300 million to $2.7 billion as of June 30, 2009 compared to March 31, 2009. The company continues to make significant progress with its working capital initiative and remains focused on strengthening its balance sheet and maintaining financial flexibility.

SEGMENT RESULTS

BioPharmaceuticals

• BioPharmaceuticals net sales totaled $4.7 billion in the second quarter of 2009, representing an increase of 4%, or 9% excluding foreign exchange impact, compared to the same period in 2008. U.S. BioPharmaceuticals net sales increased 13% to $3.0 billion in the second quarter of 2009 compared to 2008. International BioPharmaceuticals net sales decreased 9%, or increased 4% excluding foreign exchange impact, to $1.7 billion.
  • Sales growth in the second quarter was led by continued global sales increases for PLAVIX® (+11%) and strong global sales growth for ABILIFY® (+22%).
  • Bristol-Myers Squibb’s virology portfolio, led by BARACLUDE® for hepatitis B (+32%), the Sustiva franchise (+11%) and REYATAZ® for HIV (+2%), continues to demonstrate worldwide sales growth.
  • ORENCIA® and SPRYCEL® grew worldwide 40% and 41%, respectively as compared to the same period in 2008.
  • ERBITUX® sales were down 12% compared to the first quarter 2008.
• BioPharmaceuticals realized a 410 basis point increase in gross margin compared to the second quarter of 2008. Key drivers of the improvement were cost savings, including those related to productivity initiatives, foreign exchange favorability and product mix.
• BioPharmaceuticals earnings increased 46% to $1.2 billion in the second quarter of 2009 compared to the same period in 2008. The increase in earnings was driven by increased sales, improved gross margins as well as reductions in marketing, selling and administrative expenses from the company’s productivity initiatives.

Mead Johnson Nutrition Company

• Mead Johnson’s net sales totaled $719 million in the second quarter of 2009, representing a 1% decrease, or an increase of 5% excluding foreign exchange impact, compared to the same period in 2008.
• Bristol-Myers Squibb’s share of Mead Johnson’s earnings decreased by 20% to $151 million primarily due to the impact of items attributed to the February 2009 initial public offering, including the 17% reduction in ownership.

SECOND QUARTER PRODUCT AND PIPELINE UPDATE

Cardiovascular/Metabolics

• Bristol-Myers Squibb and AstraZeneca announced on June 25 that their marketing authorization application for ONGLYZA™ received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) for the treatment of type 2 diabetes in adults as add-on therapy with metformin, a thiazolidinedione, or a sulphonylurea.
• The Prescription Drug User Fee Act (PDUFA) date -- the date by which a decision from the U.S. Food and Drug Administration (FDA) is expected -- for ONGLYZA™ was extended from April 30, 2009 to July 30, 2009.
• At the American Diabetes Association Annual Scientific Sessions:
  • Interim analysis of a 42-month long-term Phase 3 extension study showed that when ONGLYZA™ was added to metformin in patients with inadequately controlled type 2 diabetes, the profile of adverse events was consistent with that seen at 24 weeks, and the treatment regimen produced long-term glycemic improvement.
  • A 12-week study of dapagliflozin demonstrated improved glycemic control in inadequately controlled type 2 diabetes patients who were treated with high doses of insulin and common oral anti-diabetic medicines.

Oncology

• At the American Society of Clinical Oncology Annual Meeting:
  • Updated survival results from follow-up extensions of three Phase 2 ipilimumab studies showed a two-year survival ranging from 30 to 42 percent in patients with advanced metastatic melanoma. Ipilimumab is being developed by the company and Medarex.
  • Based on interim results from two Phase 2 studies in castrate-resistant prostate cancer (CRPC), SPRYCEL (dasatinib) may have potential as a treatment for CRPC. A Phase 3 study of SPRYCEL in CRPC is currently ongoing.
  • The company and Exelixis reported encouraging data from an ongoing Phase 2 trial of XL184 in patients with previously-treated glioblastoma multiforme, the most common and aggressive form of brain tumor.
• In May, the FDA granted full approval for SPRYCEL for the treatment of adults in all phases of chronic myeloid leukemia (CML) who are resistant or intolerant to prior therapies including Gleevec (imatinib mesylate). SPRYCEL was originally approved in 2006.
• On July 20, the company and its partner Eli Lilly and ImClone Systems announced that the FDA had approved revisions to the U.S. prescribing information for ERBITUX® concerning the treatment of patients with an epidermal growth factor receptor (EGFR)-expressing metastatic colorectal cancer (mCRC). The labeling revisions include a modification which states that ERBITUX is not recommended for patients whose tumors had K-ras mutations in codon 12 or 13. An estimated 40 percent of patients with mCRC have K-ras mutations while the majority, approximately 60 percent, has a wild-type K-ras gene.

Immunology

• At the American Transplant Congress in May, the company presented the results of two Phase 3 trials for belatacept, an investigational co-stimulation blocker being studied for use in solid organ transplantation. The data suggest that belatacept may represent a promising therapeutic option for kidney transplant patients.
• Results of two studies that demonstrated the consistent safety and effectiveness of ORENCIA over 5 and 7 years of treatment in rheumatoid arthritis patients who have had an inadequate response to methotrexate were presented in June at the European Congress of Rheumatology (EULAR).

STRATEGIC UPDATE

On July 22, Bristol-Myers Squibb and Medarex announced that the companies have signed a definitive merger agreement providing for the acquisition of Medarex by Bristol-Myers Squibb. The acquisition positions Bristol-Myers Squibb for long-term leadership in biologics; gives the company full rights to a promising phase III compound, ipilimumab; significantly expands the company’s oncology and immunology pipeline and provides access to novel antibody discovery technology.

On April 6, the company announced an agreement with Otsuka Pharmaceutical, Ltd. to extend the U.S. portion of the companies’ long-standing agreement for the development and commercialization of ABILIFY® from the currently scheduled end date of November 2012 until the expected loss of exclusivity in April 2015. The collaboration allows Bristol-Myers Squibb to refocus its energies toward longer-term growth goals for 2014 and beyond, improves the company’s overall financial stability while maintaining financial flexibility for the future, and provides an expected bridge to the company’s new neuroscience products.

2009 GUIDANCE

Bristol-Myers Squibb has revised the 2009 GAAP EPS guidance to $1.58 to $1.68 and raised non-GAAP EPS guidance to $1.95 to $2.05. Key 2009 guidance assumptions include low single-digit revenue growth (high single digit growth excluding foreign exchange); a full-year gross margin improvement of approximately 200 basis points; advertising and promotion increase in the low-to-mid single-digit range; marketing, sales and administrative expense decrease in the low-to-mid single digits; research and development expense growth in the mid single-digit range; and an effective tax rate of approximately 25%.

The company reaffirms guidance that it expects non-GAAP earnings per share from continuing operations attributable to the company to grow at a minimum 15 percent compounded annual growth rate, from the 2007 base through 2010 without rebasing for the sale of the ConvaTec business, excluding the impact of any U.S. healthcare reforms, costs associated with productivity transformation initiatives and other specified items that have not yet been identified and quantified.

The non-GAAP 2009 guidance and the three-year compound annual growth rate exclude other specified items such as gains or losses from sale of businesses and product lines; from sale of equity investments and from discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for licensing arrangements; debt retirement costs; impairments to investments; and significant tax events.

The financial guidance for 2009 and the three-year compound annual growth rate include the impact of the company’s acquisition of Medarex but exclude the impact of any potential future strategic acquisitions and divestitures and further assume that the company and its partner, sanofi-aventis, maintain U.S. exclusivity for the PLAVIX^® patent through at least 2010. The planned acquisition of Medarex is expected to decrease the company’s earnings per share by $0.02 to $0.03 in 2009 and $0.07 to $0.09 in 2010.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings and earnings per share information, adjusted to exclude certain costs, expenses, gains and losses and other specified items. Among the items in GAAP measures but excluded for purposes of determining adjusted earnings and other adjusted measures are: charges related to implementation of the Productivity Transformation Initiative; gains or losses from the sale of businesses and product lines; discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for in-licensing of products that have not achieved regulatory approval that are immediately expensed; payments for in-process research and development; impairments to investments; and significant tax events. This information is intended to enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. For example, non-GAAP earnings and earnings per share information is an indication of the company’s baseline performance before items that are considered by the company to be not reflective of the company’s ongoing results. In addition, this information is among the primary indicators the company uses as a basis for evaluating company performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.

Statement on Cautionary Factors

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as "anticipate", "estimates", "should", "expect", "guidance", "project", "intend", "plan", "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, market factors (including whether uncertainties in or further deterioration of the credit and capital markets will lead to future impairments to the company’s investment portfolio), competitive product development and approvals, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical rebates and reimbursement, claims and concerns that may arise regarding the safety and efficacy of in-line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, difficulties and delays in product development, manufacturing or sales, patent positions and the ultimate outcome of any litigation matter, including whether Apotex will prevail in its appealing of the Circuit court’s decision in the PLAVIX® patent litigation. These factors also include the company’s ability to execute successfully its strategic plans, including its Productivity Transformation Initiative, the expiration of patents or data protection on certain products (including the expiration of data protection for PLAVIX® in the European Union), and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the products will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Company and Conference Call Information

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to extend and enhance human life. For more information visit www.bms.com.

There will be a conference call on July 23, 2009 at 10:30 a.m. (ET) during which company executives will address inquiries from investors and analysts. Investors and the general public are invited to listen to a live web cast of the call at http://investor.bms.com or by dialing 913-312-1296, confirmation code 9244491. Materials related to the call will be available at the same website prior to the call.

ABILIFY^® is the trademark of Otsuka Pharmaceutical Co., Ltd.

ATRIPLA™ is a trademark of both Bristol-Myers Squibb Co. and Gilead Sciences, Inc.

AVAPRO^®, AVALIDE^® and PLAVIX^® are trademarks of sanofi-aventis

ERBITUX^® is a trademark of ImClone LLC. ImClone Systems is a wholly-owned subsidiary of Eli Lilly and Company.