David Elkins
Executive Vice President and Chief Financial Officer at Bristol-Myers Squibb
Thank you, Chris, and good morning, everyone. As Chris highlighted, we're off to a good start to the year with top line growth as shown on slide 10. As a reminder, unless otherwise stated, all comparisons are made from the same period in 2023 and sales growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. Building our momentum coming out of last year, we're executing against our plan to drive our growth portfolio, which delivered approximately 11% sales increase in the first quarter compared to the prior year and now represents approximately 40% of our total revenue.
This growth was broad-based, with most growth brands recording significant increases in the quarter. Our legacy portfolio also contributed to overall sales growth in the quarter, with strong sales of Eliquis, which remains an important cash flow generator for the company. Now turning to the first quarter performance of our key brands, and starting with oncology on slide 11.
On this slide, you can see the impact of our strategy and broadening our I-O franchise and expanding in new targeted solid tumor therapies. Global sales of Opdivo were impacted by inventory work down and timing of orders in the U.S., partially offset by demand growth. As we said in the past, we expect to see growth at a more modest pace than 2024. And Opdualag, a standard of care treatment in first-line melanoma, generated strong quarterly sales with U.S. sales growth primarily driven by strong market share.
We are very encouraged by the future expansion potential of Opdualag, not only in adjuvant melanoma, but also in our plans to develop it in first-line lung cancer. This, along with the anticipated launch of our Opdivo subcutaneous formulation next year, we will extend our I-O franchise well into the next date. Our targeted solid tumor therapies expanded with the addition of Krazati after the completion of Mirati acquisition in late January. Our reported sales represent a partial quarter.
And on a pro forma basis, Krazati global sales in Q1 were approximately $27 million, primarily in the U.S. With recent conditional marketing approval by the European Commission, we look forward to bringing Krazati to more patients towards the end of the year. Augtyro's first quarter performance reflects positive early sales trends. We remain focused on driving awareness and penetration based upon its potential best-in-class profile. Now moving to slide 12 and our cardiovascular franchise.
Eliquis remains the market-leading oral anticoagulant worldwide. Q1 sales in the U.S. grew 12%, primarily due to strong demand, including increased market share. Internationally, sales were roughly in line with prior year. Camzyos generated strong sales in the quarter, nearly tripling its performance versus Q1 of last year. In the U.S., sales were driven by demand growth including an almost 25% increase in commercial dispenses since Q4 of 2023.
Sequentially, U.S. sales of Camzyos were impacted by the inventory dynamics of approximately $20 million and gross to net impacts from the typical copay reset at the start of the new year. We expect the momentum of Camzyos to continue, supported by the compelling real-world evidence in over 1,500 patients presented earlier this month at ACC. Let's now turn to slide 13 and discuss our hematology business.
Our legacy brand, Revlimid, saw sales decline in the first quarter. Utilization of free drug program normalized in the quarter. We continue to anticipate variability in Revlimid sales quarter-to-quarter based upon historic dispensing patterns in specialty pharmacies. As anticipated, there is an increased volumes of U.S. generics starting in March. Turning to Reblozyl, growth in the quarter was driven primarily by the strong U.S. launch of the broader commands label and first-line MDS.
International sales growth benefited from the new market launches, and we look forward to bringing Reblozyl to more patients with the recent first-line approvals in the EU and Japan. In cell therapy portfolio, global Breyanzi sales growth reflected the strength of the clinical profile and improved manufacturing capacity. Consistent with what we previously communicated, starting in Q2, we expect Breyanzi to benefit from the recent new indications and expanded manufacturing capacity. With Abecma, U.S. performance in the quarter was impacted by ongoing competitive pressures.
Future demand will benefit from the recent KarMMa-3 approval, which expands the addressable patient population. Internationally, Abecma demand growth was offset by unfavorable pricing pressures to secure access. Now moving to immunology on slide 14. Zeposia sales in the quarter were primarily due to demand of new patient starts in multiple sclerosis. SOTYKTU sales performed in line with our expectation. During the quarter, we delivered on our goal of achieving roughly 10,000 commercially paid prescriptions.
Sales in the quarter reflected increased demand and expanded commercial access. In addition, we expect to add another large PBM later this year that will expand access coverage by approximately 30 million lives. Now turning to slide 15. I will walk you through the remainder of our P&L, and my comments will be on a non-GAAP basis. As expected, gross margin decreased compared to the prior year, primarily due to product mix. Excluding acquired in-process R&D, first quarter operating expenses increased mainly due to the impact of the recent acquisitions and higher cost to support the overall portfolio.
We expect this growth to be mitigated later in the year through savings and productivity initiatives I will speak to shortly. Other income and expense declined as expected in the first quarter, primarily due to lower PD-1 royalty rate and the financing costs associated with the recent transactions. Acquired in-process R&D in the quarter was $12.9 billion, primarily due to the previously disclosed onetime charge of $12.1 billion for the Karuna transaction and $800 million for SystImmune.
Our tax rate in the quarter was impacted by the onetime nondeductible in-process R&D charge for Karuna. Before the impact of acquired in-process R&D, our first quarter earnings would have been $1.89. Taking into account the impact from the recent transactions, including acquired in-process R&D, we reported an earnings per share loss of $4.40. Now moving to the balance sheet and capital allocation on slide 16.
Cash flow from operations remained strong with approximately $2.8 billion generated in the quarter, resulting in approximately $10 billion in cash and cash equivalents and marketable debt securities on hand as of March 31. Our strategic approach to capital allocation remains unchanged. We are committed to the dividend. And as we said previously, we plan to utilize our cash flow to repay approximately $10 billion of debt over the next two years. And we remain financially disciplined around business development to further strengthen the company's long-term growth profile. Next, let's turn to slide 17 to discuss our productivity initiative.
As Chris described earlier, we have taken action to increase productivity and efficiency and focus our efforts on the assets and opportunities with the highest potential ROI and those most likely to drive our long-term growth. As part of this process, we are making deliberate choices to prioritize the assets that will have the greatest clinical benefit to impact areas of high unmet need and where we can deliver the most value for patients. We will disproportionately invest in higher-return opportunities, which improves our portfolio ROI and strengthens our growth profile in the second half of the decade.
After a thoughtful process, we have made the decision to discontinue and externalize several clinical assets. We anticipate cost savings from these actions of approximately $1.5 billion by the end of 2025, thereby absorbing the incremental opex expense from the recent deals. These cost savings will come from across the organization and include reductions in direct clinical expense, site rationalization and elimination of open roles and reduction in headcount.
As we realize these savings, we will reinvest in the highest potential opportunities. Now turning to slide 18. I'll walk through the impact of our recently closed acquisition on our EPS guidance. As you can see on this slide, if you take our previously stated non-GAAP EPS guidance range of $7.10 to $7.40 from February and include the previously stated impact of deal dilution and the onetime impact of acquired in-process R&D, our revised range continues to reflect the strong outlook of the business as we told you in February.
Now let's walk through the details of our guidance on slide 19, starting with revenue. As is our practice, we provide revenue guidance on a reported basis as well as on an underlying basis, which assumes currency remains consistent with prior year. We continue to expect 2024 total revenues to increase in the low single-digit range at reported rates as well as excluding foreign exchange. This reflects our confidence in the growing momentum of our growth portfolio, including products such as Opdivo, Reblozyl, Breyanzi, Camzyos and SOTYKTU.
And as a reminder, the sotatercept royalty will be included in the other growth revenue line. We continue to expect gross margin to be approximately 74%. And as we saw last year, we should see a sequential dip in Q2 related to our sales mix. Excluding acquired in-process R&D, we continue to expect our total operating expenses to increase in the low single-digit range, reflecting incremental costs associated with the recent acquisitions, partially offset by the realization of internal savings through the productivity initiatives I mentioned earlier.
Given the timing of the deal closures, we expect to come in at the upper end of our guidance range with an expected step-up in Q2 and the remaining opex to be more evenly spread across the back half of the year. We remain aligned with our previous operating margin to target at least 37% through next year. For OI&E, we now expect approximately $250 million of expense primarily reflecting the debt financing costs from Karuna and RayzeBio.
The tax rate was affected by onetime nondeductible expense of the Karuna acquired and processed R&D charge, which impacted our non-GAAP net income. Excluding this impact, the estimated underlying tax rate in the quarter was about 19.5%. And as a result, we now see full year underlying tax rate of about 18%. Before we move to Q&A, let me take a minute to read some of the key highlights on our call today.
We grew the top line, we advanced the pipeline, and we are executing our productivity initiative and our expectations for the underlying strength of the business remains unchanged from the beginning of the year. Finally, I'd like to recognize our BMS employees around the world for their unwavering hard work and commitment as we continue to make progress in strengthening the company's long-term growth profile and bringing truly transformational medicines to patients.
With that, I'll now turn the call over to Tim for Q&A.
