Delivering Transformational Medicines to Patients
`
`2014 | Annual Report
`
`Rusty Cline participated in a clinical trial for a
`new immunotherapy from Bristol-Myers Squibb.
`
`LOPQ
`
`AstraZeneca Exhibit 2116
`Mylan v. AstraZeneca
`IPR2015-01340
`
`Page 1 of 114
`
`

`

`WE WORK FOR
`
`R u s t y
`
`Since he was (cid:31)rst diagnosed with stage four metastatic
`melanoma in 2006, Rusty Cline, 51, who lives on a
`horse farm in Purcellville, Virginia, has had to endure at
`least 10 surgeries, including two brain surgeries, as the
`cancer spread and ravaged his body. He had enrolled
`in several clinical trials for experimental treatments, but
`recurrences forced him to leave those studies. In 2012,
`he was given Yervoy (ipilimumab), which had recently
`been approved as a potential treatment option. But his
`disease continued to progress.
`
`“By September, I had quite a few active tumors that
`were sticking out of my body. I wasn’t able to work
`[he is an IT consultant], and was essentially just
`waiting to die. And I didn’t think the wait would be
`long,” he recalls.
`
`Yet, his parents and a close friend convinced him to
`enter one more trial – even though it was hundreds of
`miles from home – at Memorial Sloan Kettering Cancer
`Center in New York City – and stood by him throughout
`his treatments. The study for nivolumab (approved in
`the U.S. in late 2014 as Opdivo for certain patients with
`metastatic melanoma) sought to determine whether his
`immune system could be activated to (cid:31)ght the disease,
`even after failing on other treatments.
`
`After eight weeks, scans showed a 23 percent reduc-
`tion in Rusty’s tumors. And he reports that today the
`tumors have shrunk by about 95 percent. “The doctors
`think that what’s left is probably not even the cancer
`anymore, but scar tissue,” he adds. “From the time I
`started on Opdivo, I could feel the tumors in my body
`getting smaller. The question for me was no longer
`whether it was going to work, but how quickly it was
`going to work.”
`
`Today Rusty has gone back to work and to two of his
`favorite hobbies – galloping horses and riding motor-
`cycles. “I’m doing everything I used to do. It’s simply
`
`amazing,” he says. “I’M DOING EVERYTHING I
`
`USED TO DO. IT’S SIMPLY
`AMAZING.”
`
`OUR PERFORMANCE IN 2014 across brands
`and geographies, continued innovation and
`
`
`productivity in productivity in productivity R&D, and investments in business
`development opportunities re(cid:31)ect the strength
`and execution of our BioPharma strategy and
`positions us well for 2015. By keeping patients
`at the center of everything we do, we are working
`hard to develop innovative medicines that have
`the potential to transform the lives of the people
`we serve.
`
`The patient stories shared in this Annual Report depict individual patient responses to
`our medicines or investigational compounds and are not representative of all patient
`responses. In addition, there is no guarantee that potential drugs or indications still in
`development will receive regulatory approval.
`
`Page 2 of 114
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`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`MESSAGE FROM THE CHIEF EXECUTIVE OFFICER
`
`“
`
` BY EVERY INDICATION, BRISTOL-MYERS SQUIBB IS WELL POSITIONED
`FOR CONTINUED SUCCESS. WE HAVE THE RIGHT PRODUCTS. WE HAVE
`THE RIGHT PLANS. WE HAVE THE RIGHT PEOPLE.”
`– Lamberto Andreotti, Chief Executive Of(cid:31)cer
`
`2014 was an exciting year for Bristol-Myers Squibb. We achieved
`commercial and clinical milestones. We launched new and innovative
`products. We strengthened our company in meaningful ways.
`
`Throughout the year, we executed against our BioPharma
`strategy, delivering across the organization and across the
`globe. We also accelerated our evolution to a diversi(cid:31)ed specialty
`BioPharma company, transforming our organization and laying
`the foundation for future growth.
`
`This balanced approach – driving results today, while building
`for tomorrow – remains a key to our success. It is good for our
`business. It is good for our patients.
`
`Delivering Our Results
`
`In 2014, we had revenues of $15.9 billion, representing 6% sales
`growth, excluding our diabetes franchise. Our new and inline
`product sales grew by 19%. Our performance across key markets
`was strong.
`
`Immuno-Oncology
`
`With respect to immuno-oncology, 2014 was a groundbreaking year.
`
`Sales of Yervoy (for metastatic melanoma) continued to pick up
`momentum. We reached $1 billion in global annual sales and
`have every reason to be optimistic about the future as prescription
`trends are very encouraging.
`
`Opdivo was approved for metastatic melanoma in the U.S. and
`Japan, and we are working towards approvals in Europe and the
`rest of the world for both melanoma and lung cancer. Over the
`course of the year, we presented important clinical data regarding
`Opdivo, including the (cid:31)rst con(cid:31)rmation of a survival bene(cid:31)t for a
`PD-1 immune checkpoint inhibitor in both melanoma and lung
`cancer. And with Opdivo being studied across 20 tumor types in
`more than 50 trials – as both a monotherapy and in combination
`with other medicines – we are anticipating more positive data in
`the months to come.
`
`Most recently, in early March 2015, Opdivo was approved in the
`U.S. for the treatment of patients with previously treated metastatic
`squamous non-small cell lung cancer. This was a very signi(cid:31)cant
`development – one that provides this patient population with its
`(cid:31)rst immuno-oncology therapy.
`
`Hepatitis C
`
`With respect to hepatitis C, 2014 was an exciting year, because it
`became evident that an actual cure for this chronic disease is now
`possible. It also became evident that this increasingly competitive,
`increasingly complex and rapidly changing area of high unmet
`medical need requires that we constantly update our approach.
`
`We received approvals for and have launched Daklinza in key regions
`around the world. Our dual regimen of Daklinza and Sunvepra is
`addressing the needs of HCV patients in Japan, while the combina-
`tion of Daklinza with other HCV agents is on the market in several
`countries around Europe.
`
`In the U.S., we withdrew our New Drug Application for asunaprevir,
`due to the rapidly changing treatment landscape in HCV. Conse-
`quently, we received a Complete Response Letter from the FDA
`for Daklinza, requesting additional information about its use in
`combination with other agents different than asunaprevir. This has
`delayed a potential U.S. approval. However, we have Phase III data
`for Daklinza in combination with another agent that we will use to
`address the FDA request, and we remain con(cid:31)dent that we will be
`able to resume the U.S. review process quickly.
`
`Cardiovascular
`
`With respect to Eliquis, 2014 was a very good year – one charac-
`terized by new indications, accelerated growth and an increased
`appreciation for the product’s unique and differentiated pro(cid:31)le.
`
`Eliquis sales grew every quarter, and we expect that trend to
`continue. We have invested increased resources, and our people
`have used them effectively. For that reason, Eliquis became
`
`1
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`Page 3 of 114
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`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`AT BRISTOL-MYERS SQUIBB, WE PUT PEOPLE AT THE CENTER OF ALL WE DO,
`FROM THE PATIENTS WE SERVE TO THE EMPLOYEES WHO MAKE IT ALL POSSIBLE.
`
`We are evolving to a diversi(cid:31)ed specialty BioPharma company in order to lead and win in the
`marketplace and to best ful(cid:31)ll our promises to our patients, customers and shareholders. Making
`a difference in people’s lives is what we are all about. We are united by this common goal, but each
`of us has our own source of inspiration that drives our success and motivates us to achieve more.
`
`“There are people who
`
`do a job. Then there
`are those who impact
`lives. You are among
`the latter.”
`
`“I wish to express my
`
`gratitude to BMS and
`China Cancer Foun-
`dation for bringing a
`second life for my boy.”
`
`“Now my life has
`
`become simple again
`and my quality of
`life has improved.”
`
`42
`
`Page 4 of 114
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`

`

`the number one new oral anticoagulant prescribed by cardiologists for new-to-
`brand patients in the U.S. and Japan.
`
`Laying Our Foundation
`
`Our success in 2014 was measured not only in the results driven over the course
`of the year, but also in our ability to lay the foundation for the next one and beyond.
`
`To that end, we devoted a great deal of resources – people, time and money –
`to building our pipeline of the future. In addition to the clinical work in immuno-
`oncology and hepatitis C already mentioned:
`
`• We continued to advance new HIV agents toward late-stage development.
`
`• We conducted mid-stage trials in fibrotic diseases.
`
`• We entered human trials with 12 new agents for diseases, including lupus, rheu-
`matoid arthritis, cancer, thrombosis, (cid:31)brosis and genetically de(cid:31)ned diseases.
`
`We also pursued several academic collaborations and business development
`opportunities in immuno-oncology, oncology, (cid:31)brosis and genetically de(cid:31)ned
`diseases – underscoring the fact that business development remains a top
`priority for us in areas aligned with our key strategic diseases.
`
`Serving Our Communities
`
`Throughout 2014, we continued to pursue our community-based activities
`across the globe and across therapeutic areas to help underserved populations
`and to bene(cid:31)t the places in which we live and work.
`
`Our Bristol-Myers Squibb Foundation launched two new initiatives – one to expand
`access to specialty care for vulnerable populations in the U.S. and one to address
`the lung cancer epidemic in the area of the U.S. known as the “tobacco belt,”
`which has the highest lung cancer incidence and mortality in the country.
`
`The Foundation also expanded our SECURE THE FUTURE program to the
`prevention and care for cervical and breast cancers in women living with HIV in
`sub-Saharan Africa. And we continued all of the work we have been doing to
`combat hepatitis B and C in China and India, to (cid:31)ght cancer in Central and Eastern
`Europe, and to help returning veterans and their families in the United States.
`
`With respect to sustainability, Bristol-Myers Squibb was again ranked number
`one overall on Corporate Responsibility magazine’s annual list of the “100 Best
`Corporate Citizens,” a leading benchmark for socially responsible investors and
`other stakeholders. This re(cid:30)ects our commitment to people, high ethical standards
`and progress on social and environmental sustainability.
`
`Strengthening Our Organization
`
`To accelerate our evolution, we made important changes to our company, begin-
`ning with the completion of the divestiture of our diabetes business. We refocused
`our commercial organization to optimize global brands and key markets. We
`continued to sharpen our R&D focus on specialty products. And in an effort to
`signi(cid:31)cantly expand our company’s biologics manufacturing capacity, we started
`the expansion of our plant in Devens, Massachusetts, and recently announced
`our plan to build a new state-of-the-art facility in Cruiserath, Ireland.
`
`2014 | Bristol-Myers Squibb Annual Report
`
`On January 20, 2015, Giovanni Caforio was
`designated chief executive of(cid:31)cer by the Board
`of Directors, effective May 5, 2015. Giovanni
`currently serves as chief operating of(cid:31)cer with
`responsibility for leading a fully integrated
`worldwide commercial organization and the
`companywide functions of Enterprise Services
`and Global Manufacturing & Supply. In June
`2014, Giovanni was elected to the company’s
`Board of Directors.
`
`Giovanni joined Bristol-Myers Squibb in 2000
`as vice president and general manager for
`Italy, subsequently assumed responsibility for
`South-East Europe, and was appointed senior
`vice president, European Marketing and Brand
`Commercialization, in 2004. From 2007 to 2011,
`he helped build the company’s leadership in
`immuno-oncology as the head of the U.S.
`and Global Oncology organizations. Giovanni
`made valuable contributions to the company’s
`strategic focus and operational performance in
`roles as U.S. president and chief commercial
`of(cid:31)cer from 2011 to 2014. Prior to joining
`Bristol-Myers Squibb, Giovanni spent 12 years
`with Abbott Laboratories in a number of leader-
`ship positions. Giovanni earned his M.D. degree
`from the University of Rome before joining the
`
`pharmaceutical industry.“I AM HONORED TO HAVE
`
`THE PRIVILEGE TO LEAD
`THIS GREAT COMPANY.”
`– Giovanni Caforio, M.D.
` Chief Operating Of(cid:31)cer
` and CEO-Designate
`
`3
`
`Page 5 of 114
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`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`Additionally, we made some important leadership changes.
`Giovanni Caforio was promoted to Chief Operating Of(cid:31)cer
`and was elected to the Board of Directors. Recently, he was
`also selected to serve as our next Chief Executive Of(cid:31)cer,
`effective May 5.
`
`Toward the end of the year, we expanded the role of our
`General Counsel and promoted Sandra Leung to Executive
`Vice President.
`
`We also launched an important initiative within our company –
`“Who Are You Working For?” – that has focused our attention
`even more on the people at the center of everything we do:
`patients and Bristol-Myers Squibb employees. Through videos,
`pictures and writings, we have been sharing our personal stories
`of family and friends who have faced health challenges and
`who inspire us to work for a company like Bristol-Myers Squibb,
`a company dedicated to improving people’s lives.
`
`By asking each other “Who Are You Working For?” we have
`started a new conversation within Bristol-Myers Squibb –
`one that underscores our deep, personal connection to our
`work, one that motivates us to do even more.
`
`Continuing Our Success
`
`Taken together, 2014 was a good, important year for us –
`one characterized by solid results and smart investments.
`
`By every indication, Bristol-Myers Squibb is well positioned
`for continued success. We have the right products. We have
`the right plans. We have the right people.
`
`And as we transition to the next chapter of the Bristol-Myers
`Squibb story, I will be leaving my position as CEO and becoming
`the Chairman of our Board of Directors. Although I am certainly
`looking forward to this new opportunity, I will miss working along-
`side my friend and colleague, Jim Cornelius, who will be retiring.
`
`I am also looking forward to working with our new CEO.
`Giovanni’s promotion not only guarantees a smooth transition
`for our leadership team; it sets the stage for a promising future
`for our company and for our patients.
`
`Message from the Chairman of the Board
`
`“ MORE THAN EVER, WE ARE MAKING A
`
`MEANINGFUL DIFFERENCE IN THE LIVES
`OF OUR PATIENTS.”
`– James M. Cornelius, Chairman
`
`I could not be more proud of our company.
`
`Financially we are solid. Operationally we are strong. And more than
`ever, we are making a meaningful difference in the lives of our patients.
`
`Over the last several years, we have transformed Bristol-Myers Squibb
`into a BioPharma leader. This has led to better results for our company.
`This has led to better outcomes for our patients.
`
`In 2007, we launched our BioPharma Transformation. That meant a
`new strategy, a new focus and a new sense of the possible. Combining
`the best of big pharma with the best of biotech, we began a process
`that fundamentally changed “what” we do and “how” we do it. More
`innovation. More improvement. More integration.
`
`In 2014, we accelerated that process as we evolved into a Diversi(cid:31)ed
`Specialty BioPharma company. We sharpened our R&D focus. We
`restructured our commercial organization. And we made a host of
`other important changes to support our evolution and to set us up
`for future success.
`
`The results have already been signi(cid:31)cant. We are now leading the
`way across multiple therapeutic areas, making major breakthroughs
`in everything from immuno-oncology to virology, and we are evolving
`our organization to better meet the challenges of an ever-changing
`external environment and the needs of our ever-deserving patients.
`
`Our company has never been stronger. Our future has never been
`brighter. And I have full con(cid:31)dence that my successor, Lamberto
`Andreotti, will bring the same energy, vision and passion to the position
`of Board Chairman that he has brought to his role of Chief Executive
`Of(cid:31)cer. I also have full con(cid:31)dence that our next CEO, Giovanni Caforio,
`and the entire Bristol-Myers Squibb family will continue to build on the
`foundation we have established and continue delivering for our patients.
`
`Thank you for the opportunity to serve during the last ten years.
`
`Lamberto Andreotti
`Chief Executive Of(cid:31)cer
`March 5, 2015
`
`James M. Cornelius
`Chairman
`March 5, 2015
`
`44
`
`Page 6 of 114
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`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`Bristol-Myers Squibb
`Business Highlights
`
`“2014 GLOBAL SALES of $15.9 billion included positive
`
`results for key growth drivers including Eliquis, which grew
`by $628 million; Orencia, which increased 14%;
`Sprycel, up 17%; Yervoy, which grew 36%; and our
`hepatitis C franchise, with combined sales of $256 million.”
`
`5
`
`BMY
`NN
`
`Total shareholder return,
`including dividends, was
`14% for 2014.
`
`REVENUE GROWTH FOR KEY PRODUCTS
`
`The new commercial model for Bristol-Myers Squibb places a special
`focus on investing in and growing our key brands while maintaining
`all our major franchises. During 2014, our key brands delivered strong
`performance, including double-digit sales growth that, in many cases,
`has outpaced the market. Our successes re(cid:30)ect the ability of world-
`wide brand teams to work cooperatively across our commercial, R&D
`and medical groups. We have also successfully aligned markets around
`global brand messages that resonate with health care providers and
`their patients. And most importantly, our medicines have continued to
`deliver real bene(cid:31)ts to patients who rely on us every day.
`
`2014 WORLDWIDE SALES
`
`[ includes Puerto Rico
`
`includes Russia and Turkey
`
`includes Japan (6%), China (4%)
`
`includes royalties & other alliance-related
`revenues for products not sold by our
`regional commercial organizations
`
`[[
`
`[
`
`UNITED STATES
`49%
`
`EUROPE
`23%
`
`REST OF THE WORLD
`21%
`
`OTHER
` 7%
`
`
`
`GLOBAL SALES
`BY REGION
`
`Page 7 of 114
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`

`2014 | Bristol-Myers Squibb Annual Report
`
`The Strategy Is Delivering
`
`“WHAT WE DO – we focus on our customers’ needs, giving maximum
`
`priority to accelerating pipeline development, delivering sales growth
`and continuing to manage costs.”
`
`– Lamberto Andreotti, Chief Executive Of(cid:31)cer
`
`OPDIVO
`
`In early March 2015, Opdivo (nivolumab) was
`approved in the U.S. for the treatment of patients
`with metastatic squamous non-small cell lung
`cancer (NSCLC) with progression on or after prior
`therapy. Opdivo is the (cid:31)rst and only PD-1 therapy
`to demonstrate overall survival in previously
`treated metastatic squamous NSCLC. Lung
`cancer is one of the leading causes of cancer
`deaths in the U.S., and non-small cell lung cancer
`is one of the most common types of the disease,
`accounting for about 85 percent of cases. (Read
`more about Opdivo and other company efforts in
`immuno-oncology beginning on page 12.) This
`approval is the second for Opdivo in the U.S.
`and follows an approval less than three months
`earlier – in late December 2014 – for patients
`with unresectable or metastatic melanoma and
`disease progression following Yervoy (ipilimumab)
`and, if BRAF mutation positive, a BRAF inhibitor.
`Prior to its initial U.S. approval, Opdivo received
`market approval in Japan for unresectable
`melanoma – the (cid:31)rst time a drug targeting the
`immune system’s PD-1 pathway was approved
`anywhere in the world. In anticipation of the initial
`U.S. approval for Opdivo, the company had
`expanded its (cid:31)eld teams, including sales, medical
`affairs and experts in access and reimbursement.
`Shipments began within days of approval, and
`the company reached out to melanoma oncology
`health care providers about Opdivo within the (cid:31)rst
`two weeks. Interest has remained very high. The
`
`company’s understanding of physician needs
`and payer focus, along with a well-developed
`customer-focused infrastructure, helped Opdivo
`launch with a superior customer experience
`and service. The teams also built on their
`experience with Yervoy and an established
`commercial presence in the U.S. marketplace.
`Additional global regulatory (cid:31)lings in melanoma
`and lung cancer are currently under review while
`an unprecedented effort continues to explore
`additional uses for Opdivo in multiple tumor
`types as monotherapy and in combination with
`other agents.
`
`SPRYCEL
`
`Progress continues in establishing Sprycel (dasatinib) as an important medicine in the treatment of
`chronic myeloid leukemia (CML), especially in (cid:31)rst-line settings. In differentiating Sprycel in a highly
`competitive marketplace, the company has helped physicians understand its deep and fast response
`as well as its simple once-daily dosing with no food restrictions. The result has been double-digit
`growth. Along with positive long-term ef(cid:31)cacy data in both (cid:31)rst- and second-line uses, Sprycel
`continues to support a predictable and manageable side effect pro(cid:31)le. Plans are to study Sprycel
`alone and in combination with assets in the company’s immuno-oncology portfolio (including Opdivo)
`to determine whether certain patients can continue to sustain a clinical response after discontinuing
`therapy. Early studies are also ongoing to investigate the potential use of Sprycel in certain patients
`with advanced non-small cell lung cancer.
`
`ELIQUIS is the #1
`novel oral anticoagulant
`prescribed by
`cardiologists for
`new-to-brand patients
`in the U.S. and Japan.
`
` ELIQUIS GLOBAL GROWTH
`
`In 2014, the use of Eliquis (apixaban)
`broadened, with additional approvals in
`the U.S. and E.U. for the treatment and
`reduction in the risk of recurrent venous
`thromboembolism, which includes deep
`vein thrombosis (DVT) and pulmonary
`embolism. Eliquis was already approved for
`use in patients with nonvalvular atrial (cid:31)bril-
`lation and the prophylaxis of DVT following
`hip and knee replacement surgeries. In
`addition to new uses, Eliquis has bene(cid:31)ted
`from increased investments focused on
`ensuring that health care providers and
`patients understand the ef(cid:31)cacy and safety
`pro(cid:31)le of Eliquis. In its three biggest mar-
`kets – the U.S., Germany and Japan, which
`together represent about 80 percent of its
`total sales – Eliquis continued its strong
`growth. In the U.S. and Japan, it became
`the number one novel oral anticoagulant to
`be prescribed by cardiologists for new-to-
`brand patients. In addition, positive results
`of a Phase III study were announced on an
`investigational reversal agent for patients
`who may require reversal of the antico-
`agulation effects of Eliquis due to a major
`bleeding event or because they require
`emergency surgery.
`
`6
`
`Page 8 of 114
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`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`In 2014, we invested $4.5 billion in R&D, which included the
`discovery and development of new medicines for patients.
`
`Kathy took Yervoy for
`metastatic melanoma
`in 2007.
`
`YERVOY
`Yervoy (ipilimumab) broke new ground in
`2011 when it became the (cid:31)rst immuno-
`oncology agent to demonstrate a long-
`term survival bene(cid:31)t in patients with
`advanced melanoma. With strong (cid:31)nan-
`cial performance across all geographies
`and $1.3 billion in global sales in 2014,
`Yervoy continues to generate strong
`demand both in community and institu-
`
`tional settings. It also has gained broad
`approval and reimbursement from health
`authorities and other payers, including
`for its use in the (cid:31)rst-line setting for
`melanoma patients in Europe and other
`parts of the world. We continue to invest
`in studying Yervoy for new indications and
`to generate additional data.
`
`12 new medicines for patients
`in the past 7 years
`
`“Orencia SC has now
`been fully launched
`in most major markets
`
`around the world.”
`
`ORENCIA
`
`Orencia (abatacept) has continued to outpace the
`rheumatoid arthritis (RA) market’s dollar growth for
`the past four years, resulting in ongoing robust share
`increases. Among its major successes in 2014 was
`surpassing $1 billion in sales for the (cid:31)rst time in the
`U.S. Additionally, Orencia SC, its subcutaneous
`formulation, has now been fully launched in most
`major markets around the world, adding to its already
`successful IV formulation. And with the publication of
`the AVERT clinical trial results this year as well as other
`clinical trial data, physicians have increasingly focused
`on the importance of the data around the earlier use of
`Orencia in patients with moderate to severe RA and its
`potential to alter the destructive course of the disease.
`Orencia remains the (cid:31)rst and only selective T-cell mod-
`ulator that inhibits co-stimulation required for full T-cell
`activation. This helps position Orencia as a (cid:31)rst-line
`biologic treatment option in patients with moderate to
`severe RA, including those with early rapidly progress-
`ing RA and poor prognostic factors.
`
`A new global campaign helped
`Daklinza – for hepatitis C – successfully
`launch across many markets in Europe.
`
`HEPATITIS C
`
`In mid-2014, Bristol-Myers Squibb received approval in Japan
`for Daklinza (daclatasvir) and Sunvepra (asunaprevir), Japan’s
`(cid:31)rst interferon-free and ribavirin-free, all-oral combination treat-
`ment for patients with genotype 1 chronic hepatitis C (HCV)
`infection. Also during the summer, Daklinza received regulatory
`approval in the E.U. for its use in combination with other
`medicinal products. We are also (cid:31)ling for approval of Daklinza
`in the U.S. The company pioneered a number of scienti(cid:31)c dis-
`coveries that have played important roles in the development of
`multiple treatment options for HCV patients around the world,
`treatments that for the (cid:31)rst time feature high cure rates. Now
`the company is turning its attention, and clinical development
`resources, to the most dif(cid:31)cult-to-treat HCV patients, where
`there is still a high unmet need, even with many new treatment
`options. These include patients who have already advanced to
`liver cirrhosis, who represent less common genotypes or who
`have had liver transplants as a result of the infection.
`
`7
`
`Page 9 of 114
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`

`2014 | Bristol-Myers Squibb Annual Report
`
`JUST 5 YEARS AGO, we had about
`40% of our development projects
`in biologics. If we look forward 3-5
`years, we believe that number could
`potentially grow to about 75%.
`
`N
`
`GLOBAL MANUFACTURING AND SUPPLY EXPANDS
`BIOLOGICS CAPABILITIES
`
`As biologics from Bristol-Myers Squibb become increasingly important in the
`treatment of serious diseases, the company has continued to expand its capa-
`bilities to develop and manufacture these important new medicines. In 2013
`we announced a $250 million expansion of our manufacturing complex in
`Devens, Massachusetts, nearly doubling the size of the workforce there. This
`will help the company expand the manufacture of potential biologics for use in
`clinical trials. Construction is expected to be completed in 2015, bringing our
`investment to $1 billion and our employee count to 750 in Devens. In addition,
`in late 2014, Bristol-Myers Squibb announced plans for the construction of a
`new, large-scale biologics manufacturing facility in Cruiserath, Ireland, which
`would create up to 400 manufacturing jobs and another 1,000 jobs during
`the construction phase. The new plant will be built on the grounds of the
`company’s existing bulk pharmaceutical manufacturing plant. The full cost
`of the facility when (cid:31)nalized is anticipated to be comparable to the invest-
`ment made in its Devens biologics facility. During the year, the company also
`announced an agreement with Lonza for a multi-year expansion of an existing
`biologics manufacturing agreement, including production at Lonza’s facility
`in Portsmouth, New Hampshire. The aim is to meet anticipated demand for
`our commercial biologics portfolio and to supplement in-house manufacturing
`capabilities for late-stage clinical assets.
`
`8
`
`CULTIVATING INNOVATION THROUGH
`BUSINESS DEVELOPMENT
`
`Business development remains a top priority for Bristol-Myers
`Squibb. The company is focused on sourcing innovation both
`internally and externally through commercial, development,
`research and platform technology opportunities that support
`both our near-term portfolio and long-term growth.
`
`In 2014, we continued to fuel our leadership in immuno-
`oncology and our evolution to a diversi(cid:31)ed specialty BioPharma
`company in a variety of ways, many of which are discussed in
`the Special Report that begins on page 9. In early 2015, we
`have already announced several additional transactions and
`expect to continue this approach. Since publication of our
`last annual report, we have:
`
`• Entered multiple clinical collaborations to help generate data
`investigating how our immuno-oncology pipeline works in
`combination with other agents, including agreements with
`Celldex Therapeutics, Eli Lilly, Ono Pharmaceutical and
`Kyowa Hakko Kirin, Five Prime Therapeutics, Seattle Genetics,
`Celgene, Pharmacyclics and Janssen, Novartis, Incyte and
`the University of Texas MD Anderson Cancer Center.
`
`• Announced plans to acquire Flexus Biosciences, giving us
`rights to potential immunotherapies that focus on modulating
`the tumor microenvironment.
`
`• Broadened our efforts to discover and develop novel
`approaches to treat serious disease through a variety of
`unique alliances and collaborations, including – in immuno-
`oncology – CytomX Therapeutics, Five Prime Therapeutics
`and Rigel Pharmaceuticals.
`
`• Enhanced our portfolio by acquiring rights to novel assets
`across several areas of interest, such as oncology, (cid:31)brosis
`and genetically de(cid:31)ned diseases, including agreements with
`the California Institute for Biomedical Research, Galecto and
`F-star Alpha and the acquisition of iPierian, Inc.
`
`• Partnered with academic and research institutions to identify
`and speed development of promising science and technolo-
`gies, including a breakthrough agreement with Allied Minds
`to advance discoveries of biopharmaceutical innovations
`at leading U.S. academic research institutions.
`
`• Developed, for the (cid:31)rst time, investments with venture
`capital funds to expand and enhance our discovery
`efforts and clinical pipeline.
`
`Page 10 of 114
`
`

`

`2014 | Bristol-myers squibb Annual Report
`
`speCIAl RepoRt
`
`Delivering Transformational Medicines to Patients
`
`9
`
`Page 11 of 114
`
`

`

`2014 | Bristol-Myers Squibb Annual Report
`
`Evolving Our
`Business Model
`
`OUR COMMERCIAL AND R&D ORGANIZATIONS share a common purpose:
`to accelerate innovation in areas of high unmet medical need, and offer mean-
`ingful and differentiated improvements in the lives of patients. As you will see
`in the pages that follow, Bristol-Myers Squibb has set a high bar for developing
`and delivering large treatment effects wherever possible. We are focusing on
`therapies that may be (cid:31)rst- or best-in-class, with novel mechanisms of action
`and innovative therapeutic approaches. Indeed, some may even be transfor-
`mational for medical practice, for biomedical science and – most important –
`for patients and their families.
`
`An Evolving Business Model
`
`A number of principles have continued
`to guide efforts to build a “benchmark”
`commercial organization that is able to
`deliver market-leading performance while
`bringing the results of innovative science
`to health care providers and their patients.
`First, enhancing an external focus helps drive
`competitiveness and create value for all our
`stakeholders. It also helps us make neces-
`sary choices and allocate the right resources
`appropriately. Second, speeding therapies
`to patients requires an emphasis on simpli-
`(cid:31)cation, including streamlining governance
`and decision-making. Cooperation is key to
`increasing ef(cid:31)ciency and effectiveness. Third,
`(cid:31)nding new and better ways to develop and
`motivate people will improve performance
`across geographies and functions, ensuring
`meaningful interactions with customers and
`the right strategic and operational alignments
`around key growth drivers and therapies
`in development.
`
`For example, in France, one of Bristol-Myers
`Squibb’s most important markets, the general
`manager leads an innovative initiati