Bristol Myers Squibb · 10-Q · Item 2 MD&A

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

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related footnotes included elsewhere in this Quarterly Report on Form 10-Q to enhance the understanding of our results of operations, financial condition and cash flows. Certain amounts in this Quarterly Report on Form 10-Q may not sum due to rounding. Percentages have been calculated using unrounded amounts.

EXECUTIVE SUMMARY

Our principal strategy is to combine the resources, scale and capability of a large pharmaceutical company with the speed, agility and focus on innovation typically found in the biotech industry. Our 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 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. T1Additionally, 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. For further information on our strategy, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Strategy" in our 2025 Form 10-K. Refer to the Summary of Abbreviated Terms at the end of this Quarterly Report on Form 10-Q for terms used throughout the document.

T2In 2026, we made meaningful progress advancing our pipeline, highlighted by: (i) FDA acceptance of our NDA for iberdomide in RRMM with a PDUFA date of August 17, 2026; (ii) FDA acceptance of our NDA for mezigdomide in RRMM with a PDUFA date of May 13, 2027; (iii) positive interim Phase II results from the ROSETTA Lung-02 study of pumitamig in patients with previously untreated advanced NSCLC; (iv) positive interim results from two Phase III studies conducted in China for iza-bren in heavily pretreated, unresectable locally advanced or metastatic TNBC and recurrent or metastatic ESCC; and (v) FDA acceptance of our sNDA for Camzyos in adolescents with symptomatic oHCM with a PDUFA date of September 30, 2026. Additionally, Sotyktu was approved in the U.S. and EU for the treatment of adults with active PsA and Opdivo was approved in the U.S. and EU for cHL.

We continue to view business development as an important component of our strategy, focusing on opportunities where we can add strategic value and deliver returns. In May 2026, we entered into global strategic collaboration and license agreements with Hengrui to develop and commercialize 13 early stage assets in oncology, hematology and immunology. For additional information relating to this arrangement, refer to "Item 1. Financial Statements — Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements".

We remain committed to the strategic allocation of resources and investing in areas that maximize value and drive sustainable growth. 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. T3As a result of an expansion in 2025, we expect to realize annual cost savings of approximately $2.0 billion by the end of 2027. The exit costs resulting from these actions are included in our updated 2023 Restructuring Plan.

Financial Highlights

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions, except per share data

Total Revenues

$

$

$

$

Diluted earnings/(loss) per share

GAAP

$

$

$

$

Non-GAAP

Revenues increased 6% during the second quarter of 2026 and 4% year-to-date, primarily reflecting higher demand and higher average net selling prices across the Growth Portfolio and for Eliquis, which was partially offset by the impact of generics across the remainder of the Legacy Portfolio.

The increase in GAAP EPS of $0.98 and $1.08 for the second quarter of 2026 and year-to-date, respectively, was primarily due to a one-time Acquired IPRD charge in 2025 and the impact of certain specified items, including lower amortization of acquired intangible assets, and higher revenues in 2026, partially offset by the expiry of royalty income on diabetes products at the end of 2025. After adjusting for specified items, the increase in non-GAAP EPS of $0.58 and $0.36 for the second quarter of 2026 and year-to-date, respectively, was primarily due to the aforementioned Acquired IPRD charge and higher revenues, partially offset by the expiry of royalty income on diabetes products.

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

Economic and Market Factors

Governmental Actions

T4Ongoing regulatory focus on prescription drugs has increased pressures across our portfolio. 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. Under 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 and the "maximum fair price" for a 30-day supply of Pomalyst, which applies to the U.S. Medicare channel effective January 1, 2027. Additionally, 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.

T5In December 2025, we announced the U.S. Government Agreement pursuant to which BMS will receive certain U.S. tariff relief until January 2029, including for recently imposed tariffs relating to patented pharmaceuticals and associated pharmaceutical ingredients pursuant to the Presidential Proclamation dated April 2, 2026, and will not be subject to future pricing mandates in the U.S. while the agreement remains in effect. 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.

See risk factors on governmental action 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”, “—Changes to tax regulations could negatively impact our earnings” and "—Adverse changes in U.S. and global economic and political conditions could adversely affect our operations and profitability" in our 2025 Form 10-K.

Significant Product and Pipeline Approvals

The following is a summary of the significant approvals received in 2026 as of July 30, 2026:

Product

Date

Approval

Opdivo

EC approval of Opdivo in combination with doxorubicin, vinblastine and dacarbazine (AVD), for the treatment of adult and pediatric patients 12 years and older with previously untreated, Stage III or IV cHL.

Sotyktu

EC approval of Sotyktu, alone or in combination with methotrexate, for the treatment of active PsA in adults who have had an inadequate response or who have been intolerant to a prior disease-modifying antirheumatic (DMARD) therapy.

Japan's Ministry of Health, Labour and Welfare approval of Sotyktu for the treatment of PsA in patients with an inadequate response to existing therapies.

Breyanzi

Japan's Ministry of Health, Labour and Welfare approval of Breyanzi for the treatment of both relapsed or refractory MCL and relapsed or refractory MZL.

Opdivo

FDA approval of Opdivo in combination with doxorubicin, vinblastine and dacarbazine (AVD), for the treatment of adult and pediatric patients 12 years and older with previously untreated, Stage III or IV cHL.

EC approval of Opdivo in combination with brentuximab vedotin, for the treatment of children 5 years of age and older, adolescents, and adults up to 30 years of age with relapsed or refractory cHL after one prior line of therapy.

Sotyktu

FDA approval of Sotyktu for the treatment of adults with active PsA.

Refer to "—Product and Pipeline Developments" for a listing of other developments in our marketed products and late-stage pipeline since the start of the second quarter of 2026.

Acquisitions, Divestitures, Licensing and Other Arrangements

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

RESULTS OF OPERATIONS

Regional Revenues

The composition of the changes in revenues was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

% Change

Foreign Exchange(b)

% Change

Foreign Exchange(c)

United States

$

$

6

%

—

%

$

$

2

%

—

%

International

5

%

2

%

8

%

4

%

Other(a)

%

(3)

%

%

(5)

%

Total revenues

$

$

6

%

—

%

$

$

4

%

1

%

(a) Includes 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 increased 6% during the second quarter of 2026 and 2% year-to-date, reflecting higher demand and higher average net selling prices across the Growth Portfolio and for Eliquis, partially offset by the impact of generic erosion within the remainder of the Legacy Portfolio. Average U.S. net selling prices increased 4% year-to-date compared to the corresponding period a year ago.

International

•International revenues increased 5% during the second quarter of 2026 and 8% year-to-date, 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 4% during the second quarter of 2026 and 3% year-to-date.

No single country outside the U.S. contributed more than 10% of total revenues during the six months ended June 30, 2026 and 2025. 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

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

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

% Change

% Change

Gross product sales

$

$

%

$

$

%

GTN adjustments

Charge-backs and cash discounts

%

%

Medicaid and Medicare rebates

%

%

Other rebates, returns, discounts and adjustments

%

%

Total GTN adjustments

%

%

Net product sales

$

$

6

%

$

$

4

%

GTN adjustments percentage

%

%

%

%

%

%

U.S.

%

%

%

%

%

%

Non-U.S.

%

%

1

%

%

%

—

%

Reductions/(increases) to provisions for product sales made in prior periods resulting from changes in estimates were $88 million and $67 million for the three and six months ended June 30, 2026 and $42 million and $331 million for the three and six months ended June 30, 2025, respectively. The reduction to provision recognized for the six months ended June 30, 2025 primarily related to lower than expected Medicaid utilization. The changes in gross product sales and GTN adjustments were primarily due to a list price reduction for Eliquis in the U.S. in 2026.

GTN adjustments are primarily a function of product sales volume, regional and payer channel mix, contractual or legislative discounts and rebates.

Product Revenues

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

% Change

% Change

Growth Portfolio

Opdivo

$

$

(3)

%

$

$

(4)

%

U.S.

(6)

%

(9)

%

International & Other

1

%

4

%

Opdivo Qvantig

U.S.

International & Other

1

1

Orencia

7

%

7

%

U.S.

%

%

International & Other

(8)

%

(1)

%

Yervoy

6

%

5

%

U.S.

7

%

—

%

International & Other

4

%

%

Reblozyl

%

%

U.S.

%

%

International & Other

%

%

Breyanzi

%

%

U.S.

%

%

International & Other

%

%

Opdualag

%

%

U.S.

%

%

International & Other

%

%

Camzyos

%

%

U.S.

%

%

International & Other

%

%

Zeposia

%

%

U.S.

%

%

International & Other

%

%

Sotyktu

%

%

U.S.

%

%

International & Other

%

%

Krazati

%

9

%

U.S.

1

%

3

%

International & Other

8

2

5

%

Cobenfy

%

%

U.S.

%

%

International & Other

3

—

3

—

Other Growth Products(a)

%

%

U.S.

(1)

%

(5)

%

International & Other

%

%

Total Growth Portfolio

$

$

%

$

$

%

U.S.

%

%

International & Other

%

%

Legacy Portfolio

Eliquis

$

$

%

$

$

%

U.S.

%

%

International & Other

9

%

%

Revlimid

%

%

U.S.

%

%

International & Other

%

%

Pomalyst/Imnovid

%

%

U.S.

%

%

International & Other

%

%

Sprycel

%

%

U.S.

%

%

International & Other

%

%

Abraxane

%

%

U.S.

%

%

International & Other

%

%

Other Legacy Products(b)

%

%

U.S.

%

2

%

International & Other

%

%

Total Legacy Portfolio

$

$

(4)

%

$

$

(5)

%

U.S.

(4)

%

(6)

%

International & Other

(7)

%

(5)

%

Other revenue(c)

$

(9)

$

—

N/A

$

$

—

N/A

International & Other

(9)

—

N/A

$

$

—

N/A

Total Revenues

$

$

6

%

$

$

4

%

U.S.

6

%

2

%

International & Other

6

%

9

%

(a) Includes Abecma, Augtyro, Onureg, Inrebic, Nulojix, Empliciti and royalty revenues, including royalties received from Merck on Winrevair*.

(b) Includes other mature brands.

(c) Includes revenue hedging activities in 2026.

Growth Portfolio

•Opdivo revenues decreased 3% during the second quarter of 2026 and 4% year-to-date, primarily due to lower demand in the U.S., reflecting greater utilization of Opdivo Qvantig, partially offset by foreign exchange impacts of 1% and 2%, respectively. Additionally, year-to-date reflects changes in sales channel inventory and timing of customer orders in the U.S. Excluding foreign exchange impacts, revenues decreased 4% and 6%, respectively.

•Opdivo Qvantig revenues increased more than 200% during the second quarter of 2026 and year-to-date, primarily due to higher demand as a result of the product's launch in 2025.

•Orencia revenues increased 7% during the second quarter of 2026 and year-to-date, primarily due to higher demand in the U.S. and higher average net selling prices. The year-to-date increase also reflects foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 7% and 6%, respectively. Formulation and additional patents expire in 2026 and beyond. In April 2026, BMS entered into agreements with Dr. Reddy's Laboratories that allow for (i) an Orencia biosimilar for intravenous administration to be marketed in the U.S. upon approval and (ii) an Orencia biosimilar for subcutaneous administration to be marketed in the U.S. as early as February 2028. BMS is not aware of an Orencia biosimilar currently on the market in the U.S., EU or Japan.

•Yervoy revenues increased 6% during the second quarter of 2026 and 5% year-to-date, primarily due to higher demand across international markets and foreign exchange impacts of 1% and 2%, respectively. Excluding foreign exchange impacts, revenues increased 5% and 3%, respectively. BMS is not aware of a Yervoy biosimilar on the market in the U.S., EU or Japan.

•Reblozyl revenues increased 29% during the second quarter of 2026 and 23% year-to-date, primarily due to higher demand. The year-to-date increase also reflects foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 29% and 23%, respectively.

•Breyanzi revenues increased 41% during the second quarter of 2026 and 48% year-to-date, primarily due to higher demand. The year-to-date increase also reflects foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 41% and 46%, respectively.

•Opdualag revenues increased 23% during the second quarter of 2026 and 20% year-to-date, primarily due to higher demand and foreign exchange impacts of 1% in both periods. Excluding foreign exchange impacts, revenues increased 22% and 19%, respectively.

•Camzyos revenues increased 60% during the second quarter of 2026 and 74% year-to-date, primarily due to higher demand and foreign exchange impacts of 1% and 2%, respectively. Excluding foreign exchange impacts, revenues increased 59% and 72%, respectively.

•Zeposia revenues increased 12% during the second quarter of 2026 and year-to-date, primarily due to higher average net selling prices, higher demand, and foreign exchange impacts of 1% and 2%, respectively. Excluding foreign exchange impacts, revenues increased 12% and 10%, respectively.

•Sotyktu revenues increased 23% during the second quarter of 2026 and 24% year-to-date, primarily due to higher average net selling prices, higher demand, and foreign exchange impacts of 1% and 2%, respectively. Excluding foreign exchange impacts, revenues increased 23% and 21%, respectively.

•Krazati revenues increased 14% during the second quarter of 2026 and 9% year-to-date, primarily due to higher demand and higher average net selling prices. The year-to-date increase also reflects foreign exchange impacts of 1%. Excluding foreign exchange impacts, revenues increased 14% and 8%, respectively.

•Cobenfy revenues increased 81% during the second quarter of 2026 and 92% year-to-date, primarily due to higher demand in the U.S.

Legacy Portfolio

•T6Eliquis revenues increased 22% during the second quarter of 2026 and 19% year-to-date, primarily due to higher demand, foreign exchange impacts of 1% and 2%, respectively, and higher average net selling prices in the U.S. In 2026, the Company reduced the list price for Eliquis in the U.S., which resulted in higher realized average net selling prices due to lower rebates. Excluding foreign exchange impacts, revenues increased 21% and 17%, respectively. 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 in various countries in Europe.

In the EU, the apixaban composition of matter patents and related SPCs expire in November 2026. Additionally, in November 2025, BMS and Pfizer initiated a patent infringement action against an applicant seeking approval to market apixaban products in the U.S. We believe in the innovative science behind Eliquis and the strength of our intellectual property, which we will defend against infringement. Refer to "Item 1. Financial Statements—Note 18. Legal Proceedings and Contingencies—Intellectual Property" for further information.

•Revlimid revenues decreased 49% during the second quarter of 2026 and 56% year-to-date, primarily due to lower demand in the U.S. as a result of generic erosion, partially offset by higher average net selling prices. 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 revenues decreased 71% during the second quarter of 2026 and 48% year-to-date, primarily due to lower demand in the U.S. as a result of generic erosion. The second quarter decrease also reflects foreign exchange impacts of (1)%. Excluding foreign exchange impacts, revenues decreased 71% and 47%, respectively. In the U.S. (March 2026) and EU, generics have entered the market.

•Sprycel revenues decreased 27% during the second quarter of 2026 and 46% year-to-date, primarily due to lower demand as a result of generic erosion. The second quarter decrease also reflects foreign exchange impacts of (1)%. Excluding foreign exchange impacts, revenues decreased 26% and 45%, respectively. In the U.S., EU and Japan, generics have entered the market.

•Abraxane revenues decreased 47% during the second quarter of 2026 and 50% year-to-date, primarily due to lower demand as a result of generic erosion.

Estimated End-User Demand

Pursuant to the SEC Consent Order described under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations— SEC Consent Order" in our 2025 Form 10-K, we monitor inventory levels on hand in the U.S. wholesaler distribution channel and outside of the U.S. in the direct customer distribution channel. We disclose products with levels of inventory in excess of one month on hand or expected demand, subject to certain limited exceptions. There were none as of June 30, 2026, for our U.S. distribution channels, and as of March 31, 2026, for our non-U.S. distribution channels.

In the U.S., we generally determine our months on hand estimates using inventory levels of product on hand and the amount of out-movement provided by our three largest wholesalers, which accounted for approximately 90% of total gross sales of U.S. products during the six months ended June 30, 2026. Factors that may influence our estimates include generic erosion, seasonality of products, wholesaler purchases in light of increases in wholesaler list prices, new product launches, new warehouse openings by wholesalers and new customer stockings by wholesalers. In addition, these estimates are calculated using third-party data, which may be impacted by their recordkeeping processes.

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

Our non-U.S. businesses have significantly more direct customers. Information on available direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information varies widely. We limit our direct customer sales channel inventory reporting to where we can influence demand. When this information does not exist or is otherwise not available, we have developed a variety of methodologies to estimate such data, including using historical sales made to direct customers and third-party market research data related to prescription trends and end-user demand. Given the difficulties inherent in estimating third-party demand information, we evaluate our methodologies to estimate direct customer product level inventory and to calculate months on hand on an ongoing basis and make changes as necessary.

Factors that may affect our estimates include generic competition, seasonality of products, price increases, new product launches, new warehouse openings by direct customers, new customer stockings by direct customers and expected direct customer purchases for governmental bidding situations. As such, all of the information required to estimate months on hand in the direct customer distribution channel for non-U.S. business during the six months ended June 30, 2026 is not available prior to the filing of this Quarterly Report on Form 10-Q. We will disclose any product with levels of inventory in excess of one month on hand or expected demand for the current quarter, subject to certain limited exceptions, in our next quarterly report on Form 10-Q.

Expenses

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

% Change

% Change

Cost of products sold(a)

$

$

%

$

$

%

Selling, general and administrative

7

%

4

%

Research and development

%

%

Acquired IPRD

—

%

%

Amortization of acquired intangible assets

%

%

Other (income)/expense, net

NM

NM

Total Expenses

$

$

%

$

$

(8)

%

NM Calculation is not meaningful.

(a) Excludes amortization of acquired intangible assets.

Cost of Products Sold

Cost of products sold increased by $354 million in the second quarter of 2026 and $742 million year-to-date, primarily due to higher alliance profit sharing.

Selling, General and Administrative

Selling, general and administrative expense increased by $113 million in the second quarter of 2026 and $145 million year-to-date, primarily due to higher investments in new product launches, partially offset by cost savings from the Company's ongoing strategic productivity initiative in 2026.

Research and Development

Research and development expense increased by $379 million in the second quarter of 2026 and $771 million year-to-date, primarily due to higher IPRD impairment charges and the purchase of a priority review voucher, partially offset by cost savings from the Company's ongoing strategic productivity initiative in 2026.

Acquired IPRD

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

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

BioNTech upfront fee

$

—

$

$

—

$

BioArctic upfront fee

—

—

—

Evotec designation and opt-in license fees

—

—

Other

—

8

Acquired IPRD

$

—

$

$

$

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets decreased by $393 million in the second quarter of 2026 and $786 million year-to-date, primarily due to the lower amortization expense related to Pomalyst. The Pomalyst acquired marketed product right was fully amortized in the fourth quarter of 2025.

Other (Income)/Expense, Net

Other (income)/expense, net changed by $555 million in the second quarter of 2026 and $861 million year-to-date as discussed below.

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

Interest expense

$

$

$

$

Royalty income - divestitures

—

—

Royalty and licensing income

Investment income

Provision for restructuring

Litigation and other settlements

5

1

8

Contingent consideration

—

—

Equity investment (gains)/losses

Integration expenses

Divestiture (gains)/losses

1

(7)

Other

(6)

(6)

Other (income)/expense, net

$

$

$

$

•As part of our diabetes termination agreement with AstraZeneca, we received royalty payments based on net sales, which terminated as of December 31, 2025.

•Litigation and other settlements includes amounts related to pricing, sales and promotional practices disputes in 2025.

•Contingent consideration reflects the change in fair value of the contingent value rights associated with the Mirati acquisition during 2025. Refer to "Item 1. Financial Statements—Note 5. Other (Income)/Expense, Net" for more information.

•Gains on equity investments in the second quarter of 2026 and year-to-date were primarily driven by equity in net income of affiliates and upward adjustments in equity investments without RDFV, respectively. Refer to “Item 1. Financial Statements—Note 9. Financial Instruments and Fair Value Measurements” for more information.

•Divestiture (gains)/losses in 2026 include a $109 million gain related to the sale of BMS's 60% ownership stake in Sino-American Shanghai Squibb Pharmaceuticals. Refer to “Item 1. Financial Statements—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for more information.

Income Taxes

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

Earnings/(Loss) before income taxes

$

$

$

$

Income tax provision

Effective tax rate

%

%

%

%

Impact of specified items

%

%

%

%

Effective tax rate excluding specified items

%

%

%

%

Provision for income taxes in interim periods is determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The decreases in the effective tax rates for the second quarter of 2026 and year-to-date were primarily driven by jurisdictional earnings mix, including the impact of amortization of acquired intangible assets, partially offset by the income tax impact of the BioNTech collaboration in 2025. Excluding the impact of specified items, the increases in the effective tax rates for the second quarter of 2026 and year-to-date were primarily driven by jurisdictional earnings mix, including the income tax impact of the BioNTech collaboration in 2025.

Non-GAAP Financial Measures

Our non-GAAP financial measures, such as non-GAAP earnings and related EPS information, are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the Company believes they neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance.

Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including (i) amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, (ii) unwinding of inventory purchase price adjustments, (iii) 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 partnerships and other investments), 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. We also provide worldwide and 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 July 30, 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.

Specified items were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions

Inventory purchase price accounting adjustments

$

$

$

$

Site exit and other costs

2

3

2

5

Cost of products sold

Acquisition related charges

—

—

Site exit and other costs

—

3

—

5

Selling, general and administrative

—

—

IPRD impairments

Priority review voucher

—

—

Site exit and other costs

3

5

Research and development

Amortization of acquired intangible assets

Interest expense

(9)

Provision for restructuring

Litigation and other settlements

—

—

—

Contingent consideration

—

—

Equity investment (gains)/losses

Integration expenses

Divestiture (gains)/losses

1

(7)

Other

—

—

3

Other (income)/expense, net

Increase to earnings/(loss) before income taxes

Income taxes on items above

Increase to net earnings/(loss) attributable to BMS

$

$

$

$

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

Three Months Ended June 30,

Six Months Ended June 30,

Dollars in millions, except per share data

Net earnings/(loss) attributable to BMS

GAAP

$

$

$

$

Specified items

Non-GAAP

$

$

$

$

Weighted-average common shares outstanding – diluted

Diluted earnings/(loss) per share attributable to BMS

GAAP

$

$

$

$

Specified items

Non-GAAP

$

$

$

$

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Our net debt position was as follows:

Dollars in millions

Cash and cash equivalents

$

$

Marketable debt securities – current

Marketable debt securities – non-current

Total cash, cash equivalents and marketable debt securities

Short-term debt obligations

Long-term debt

Net debt position

$

$

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, debt maturities, as well as any debt repurchases through redemptions or tender offers. During the six months ended June 30, 2026, our net debt position decreased by $2.4 billion primarily driven by cash provided by operations of $4.5 billion, partially offset by dividend payments of $2.6 billion.

During the six months ended June 30, 2026, $1.7 billion of debt matured and was repaid, including the $1.2 billion 3.20% Notes and $500 million of floating rate notes.

During the six months ended June 30, 2025, the €575 million 1.000% Euro Notes matured and were repaid.

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.

As of June 30, 2026 and December 31, 2025, we had a five-year $5.0 billion revolving credit facility, which is extendable annually by one year with the consent of the lenders. In January 2026, we extended the termination date of the credit facility from January 2030 to January 2031. The facility provides for customary terms and conditions with no financial covenants and is used to provide backup liquidity for the Company's commercial paper borrowings. No borrowings were outstanding under the revolving credit facility as of June 30, 2026 and December 31, 2025.

Dividend payments were $2.6 billion during the six months ended June 30, 2026. The decision to authorize dividends is made on a quarterly basis by our Board of Directors.

Cash Flows

The following is a discussion of cash flow activities:

Six Months Ended June 30,

Dollars in millions

Cash flow provided by/(used in):

Operating activities

$

$

Investing activities

Financing activities

Operating Activities

The $1.4 billion decrease in cash provided by operating activities compared to 2025 was driven by lower net customer receipts, primarily due to a list price reduction for Eliquis, partially offset by lower expenses due to the ongoing strategic productivity initiative.

Investing Activities

Cash used in investing activities during 2026 was primarily driven by net purchases of marketable debt securities of $1.9 billion.

Financing Activities

Cash used in financing activities during 2026 was primarily driven by dividend payments of $2.6 billion and the repayment of $1.7 billion of long-term debt.

Product and Pipeline Developments

Our R&D programs are managed on a portfolio basis from early discovery through late-stage development and include a balance of early-stage and late-stage programs to support future growth. Our late-stage R&D programs in Phase III development include both investigational compounds for initial indications and additional indications or formulations for marketed products. The following are the developments in our marketed products and our late-stage pipeline since the start of the second quarter of 2026 as of July 30, 2026:

Product

Indication

Date

Developments

Breyanzi

MCL & MZL

Japan's Ministry of Health Labour and Welfare approval of Breyanzi for the treatment of both relapsed or refractory MCL and relapsed or refractory MZL. This approval is based on Cohort 4 of the Phase II TRANSCEND FL study and the MCL cohort of the Phase I TRANSCEND NHL study.

Camzyos

oHCM

Announced FDA acceptance of an sNDA for Camzyos as a potential treatment for adolescents (ages 12 years to <18 years) with symptomatic oHCM. If approved, Camzyos would be the first cardiac myosin inhibitor (CMI) to treat adolescents with oHCM. The FDA has granted the application Priority Review and assigned a PDUFA date of September 30, 2026. The sNDA submission was based on data from the Phase III SCOUT-HCM trial, which met its primary endpoint.

iza-bren

TNBC & ESCC

Announced that SystImmune’s parent company, Sichuan Biokin Pharmaceutical Co., Ltd. (Biokin), reported positive results from prespecified interim analyses of two Phase III studies evaluating iza-bren, PANKU-Breast02 and PANKU-Esophagus01. The studies demonstrated iza-bren achieved statistically significant and clinically meaningful improvements in overall survival (OS) and PFS in heavily pretreated, unresectable locally advanced or metastatic TNBC and recurrent or metastatic ESCC.

mezigdomide

RRMM

Announced that the FDA accepted an NDA for mezigdomide in combination with carfilzomib and dexamethasone (MeziKd) in patients with RRMM. The filing was based on positive results from the Phase III SUCCESSOR-2 trial showing MeziKd demonstrated a clinically meaningful and statistically significant improvement in PFS; a 52% reduction in the risk of disease progression or death compared with Kd in patients with relapsed or refractory multiple myeloma, including those at first relapse after prior treatment with an anti-CD38 monoclonal antibody and lenalidomide. The FDA has granted a PDUFA date of May 13, 2027 for this indication.

Opdivo

cHL

Announced EC approval of Opdivo in combination with doxorubicin, vinblastine and dacarbazine (AVD) for the treatment of adult and adolescent patients 12 years of age and older with previously untreated Stage III or IV cHL, resulting in an expanded label for Opdivo. This approval marks a significant milestone, establishing the Opdivo plus AVD combination as the first immunotherapy-based regimen available in the EU for newly diagnosed advanced cHL. The EC approval is based on data from the Phase III SWOG 1826 (Study CA209-8UT) which demonstrated a 58% reduction in the risk of disease progression or death with Opdivo in combination with AVD versus brentuximab vedotin plus AVD.

pumitamig

NSCLC

Announced interim Phase II data from the global Phase II/III ROSETTA Lung-02 clinical trial evaluating the investigational PD-L1xVEGF-A bispecific immunomodulator pumitamig plus chemotherapy in patients with previously untreated advanced NSCLC. The data showed encouraging anti-tumor activity, with high response rates observed in both non-squamous and squamous NSCLC and at each PD-L1 expression level.

Product

Indication

Date

Developments

Reblozyl

MF-Associated Anemia

The FDA accepted the supplemental Biologics License Application for Reblozyl with concomitant janus kinase inhibitor therapy in adults patients with MF-associated anemia receiving red blood cell transfusions. The acceptance was supported by results from the Phase III INDEPENDENCE study. The FDA granted a PDUFA date of March 11, 2027.

Sotyktu

PsA

Announced EC approval of Sotyktu, alone or in combination with methotrexate, for the treatment of active PsA in adults who have had an inadequate response or who have been intolerant to a prior disease-modifying antirheumatic therapy. This approval is based on positive results from the pivotal POETYK PsA-1 and POETYK PsA-2 Phase III clinical trials, which evaluated the efficacy and safety of Sotyktu 6 mg once daily in adults with active PsA. In both trials, treatment with Sotyktu resulted in significant improvement in disease activity, as measured by American College of Rheumatology 20 (the primary endpoint) and Minimal Disease Activity (MDA) (key secondary endpoint).

Japan's Ministry of Health, Labour and Welfare approval of Sotyktu for the treatment of PsA in patients with an inadequate response to existing therapies.

Critical Accounting Policies

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses. Our critical accounting policies are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates. For a discussion of our critical accounting policies, refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K.

There have been no material changes to our critical accounting policies during the six months ended June 30, 2026. For information regarding the impact of recently adopted accounting standards, refer to "Item 1. Financial Statements—Note 1. Basis of Presentation and Recently Issued Accounting Standards."

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (including documents incorporated by reference) and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. You can identify these forward-looking statements by the fact they use words such as “should,” “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts.

Such forward-looking statements are based on our current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These statements are likely to relate to, among other things, our goals, plans and objectives regarding our financial position, results of operations, cash flows, market position, product development, product approvals, sales efforts, expenses, performance or results of current and anticipated products, our business development strategy and in relation to our ability to realize the projected benefits of our acquisitions, alliances and other business development activities, the impact of any pandemic or epidemic on our operations and the development and commercialization of our products, 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. This Quarterly Report on Form 10-Q, our 2025 Form 10-K, particularly under the section "Item 1A. Risk Factors," and our other filings with the SEC, include additional information on the factors that we believe could cause actual results to differ materially from any forward-looking statement.

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