Gross profit improved to 71.5% of net sales in the third quarter 2009 compared to 68.9% in 2008. The improvement was driven by higher biopharmaceutical average prices, realized manufacturing efficiencies, including savings from continuous improvement efforts, favorable foreign exchange impact and favorable worldwide product mix.
Marketing, selling and administrative expenses decreased by 8%, or 5% excluding foreign exchange impact, to $1.1 billion in the third quarter of 2009 compared to the same period in 2008, primarily due to a continued reduction in general and administrative expenses through continuous improvement initiatives.
Advertising and product promotion spending was flat or increased 3% excluding foreign exchange impact, to $361 million in the third quarter of 2009 compared to 2008.
Research and development expenses were relatively flat or increased 2% excluding foreign exchange impact, to $838 million in the third quarter of 2009 compared to the same period in 2008.
The effective tax rate on earnings from continuing operations was 25.2% for the third quarter compared to 26.7% in 2008.
The company reported third quarter net earnings from continuing operations attributable to Bristol-Myers Squibb Company of $966 million or $0.48 per diluted share, compared to $588 million or $0.29 per diluted share for the same period in 2008.
The company reported third quarter non-GAAP net earnings from continuing operations attributable to Bristol-Myers Squibb Company of $1,046 million or $0.52 per diluted share, compared to $910 million or $0.45 per diluted share for the same period in 2008. An overview of specified items is discussed under "Use of Non-GAAP Financial Information".
Cash, cash equivalents and marketable securities were $7.9 billion as of September 30, 2009. The company maintains a strong net cash position of $1.3 billion. This takes into account the $2.1 billion net impact of the Medarex acquisition. Cash flow from operating activities amounted to $1.5 billion during the third quarter of 2009 and the company remains focused on strengthening its balance sheet and maintaining financial flexibility. Based on Mead Johnson Nutrition Company's announcement today that it is considering options to refinance its outstanding intercompany debt, Bristol-Myers Squibb expects to receive approximately $1.75 billion in cash upon closing of the refinancing.
"The performance in the third quarter of 2009 clearly shows the results of our outstanding business performance, disciplined financial management and overall strategic execution," said James M. Cornelius, chairman and chief executive officer. "We are transforming Bristol-Myers Squibb into a BioPharma leader and the recent approval and launch of ONGLYZA for the treatment of type 2 diabetes is a great example of what we do best: discover, develop and deliver innovative medicines that help patients prevail over serious diseases.
"As part of our transformation, we are continuing to advance our String of Pearls strategy and I'm pleased to see that we've rapidly integrated Medarex into our R&D organization. Since formally acquiring Medarex in September, its scientific leadership, clinical assets and platform technologies have been a welcome addition as we work toward becoming a leader in immuno-oncology."
Bristol-Myers Squibb is a global biopharmaceutical company committed to discovering, developing and delivering innovative medicines that help patients prevail over serious diseases. For more information, please visit www.bms.com.