David Elkins
Executive Vice President and Chief Financial Officer at Bristol-Myers Squibb
Thank you, Chris, and thank you, all, again for joining our call today. As Chris mentioned, this is an important time for BMS as we embark on our next chapter, transforming our portfolio. Our performance in 2023 reflect the continued strong growth of our in-line and new product portfolio, and the ongoing erosion of Revlimid.
Let's get started with our top-line performance on Slide 12. Unless otherwise stated, all comparisons are made versus the same period in 2022 and sales performance growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. We delivered sales of approximately $45 billion in 2023, which reflected 8% growth from our in-line and new product portfolio, offset by unfavorable impact of generic entries. During the year, we saw a continued strong demand for our key in-line products, such as Eliquis and Opdivo, while new products gained traction in their respective markets.
If you turn to Slide 13, you see our 2023 sales split between legacy and growth portfolio that Chris spoke about earlier. This is how we will report our business as we move forward. What I can tell you is the transition of the business is already well underway from our legacy to our growth portfolio. For 2023, our growth portfolio delivered approximately 15% growth. This supports our strategy that Chris discussed earlier. We see our legacy portfolio providing a solid foundation for cash flow generation in the near-term, while the products within our growth portfolio grow in significance.
Let me dive deeper into our fourth quarter and full-year sales performance, starting with our oncology portfolio on Slide 14. We are pleased with the robust demand for Opdivo, which achieved strong global sales growth for the year. In the fourth quarter, U.S. sales grew 20%, primarily driven by increased volume in core indications, including first-line lung, upper GI and adjuvant bladder cancer, partially offset by Opdualag's growth in first-line melanoma. During the quarter, U.S. and International markets each benefited from approximately $50 million of favorable stocking. Internationally, sales grew 4%, led by increased demand for lung and gastric cancer indications and from expanded reimbursement.
Turning to Opdualag, which more than doubled its full-year sales in 2023 and is now a standard of care treatment in first-line melanoma. In the fourth quarter, U.S. sales grew 80% versus the prior year and 15% sequentially, benefiting from its strong market share position. With respect to sales of Augtyro in the fourth quarter, we launched in late November and upon U.S. approval and Q4 sales reflect the initial wholesaler stocking. During 2024, we look forward to bringing this important medicine to more patients.
Let's turn to our cardiovascular on Slide 15. Eliquis generated over $12 billion in sales in 2023 and continues to be the Number 1 oral anticoagulant globally. In fourth quarter, sales grew, primarily driven by demand in the U.S. as we continue to gain market share from competitors. Internationally, sales in Q4 were broadly flat, driven by generic entry in several European markets. Sales of Camzyos in the fourth quarter and full-year were strong, including $88 million in Q4. As of December 31st, we had roughly 4,500 patients on commercial drug. And on average, we have been adding roughly 1,000 patients to commercial drug per quarter. The momentum in the U.S. for Camzyos is expected to continue in 2024. And internationally, we expect modest near-term sales contribution based on timing of reimbursement in newly launched markets.
Turning to our hematology portfolio performance on Slide 16, starting with Revlimid. Global sales for the full-year were approximately $6 billion. Looking forward, we anticipate continued variability in Revlimid sales quarter-to-quarter based upon historic patterns in specialty pharmacy dispensing. We anticipate an additional volume of U.S. generics to enter the market in March. We continue to forecast a step-down in Revlimid revenues in the range of $1.5 billion to $2.0 billion this year. Now, moving to Reblozyl. Global sales grew 40% in 2023, surpassing $1 billion on an annualized basis for the first time. For the quarter, Reblozyl generated 60% sales growth, driven by strong demand and supported by a broad U.S. first-line label. Sales grew 75% in the U.S. in Q4. Internationally, Reblozyl continues to be launched in different markets across the globe, including recently in Japan.
Turning to our cell therapy portfolio. Starting with sales of Abecma in the U.S., we continue to experience competitive impacts, while ex-U.S. demand remained strong in the quarter. We remain focused on demonstrating the benefits of the product profile to our customers' anticipation of expanded use in the U.S. upon the potential approval of KarMMa-3 data in third-line plus setting. Abecma was recently approved in Japan in the third-line setting based on KarMMa-3 data. And last week, we received positive CHMP opinion. Moving to Breyanzi. Global sales doubled year-over-year, reflecting the strength of its clinical profile and an improved manufacturing capacity. We are pleased to have received FDA Priority Review for all three of our expanded indications for Breyanzi, and look forward to the PDUFA date in March for chronic lymphocytic leukemia and additional PDUFA dates in May for follicular and mantle cell lymphoma indications. Looking to this year, we expect to see strong sales growth starting in the second quarter, driven by improved supply capacity and the potential for these new additional indications.
Moving to immunology on Slide 17. Global sales of Zeposia in 2023 grew 72% to $434 million, driven by increased demand in multiple sclerosis and ulcerative colitis. We remain focused on driving growth across both indications. For 2024, keep in mind, the typical impact of U.S. Zeposia sales in the first quarter due to co-pay assistance for commercially insured patients whose benefits reset. With Sotyktu, our goal continues to be driving demand and broadening access. We made good progress on both fronts in the fourth quarter. Fourth quarter sales in the U.S. also benefited from a clinical supply purchase of $17 million. When you strip out the one-time purchases in Q4 and Q3, we showed strong underlying sequential sales growth of approximately 40%, reflecting good pull-through from CVS and increased demand.
Going forward, the way to look at our progress in the U.S. is through commercially paid prescriptions. As we build volume and improve access, we will be subject to higher rebates, which is something to keep in mind as you model Sotyktu for 2024. Of course, Adam can talk more about this in the Q&A portion of our call today. Internationally, we expect Sotyktu to gain additional country regulatory and reimbursement approvals over time.
Switching gears to our fourth quarter P&L on Slide 18. Having just covered sales performance, let me walk through a few non-GAAP key line items. Gross margin as a percentage of sales decreased approximately 150 basis points to 76.4% compared to prior year, due to product mix and lower hedge settlement gains. Excluding acquired in-process R&D, fourth quarter and full-year operating expenses decreased primarily due to timing of expenses in 2022. The fourth quarter decline was partially offset by increased investments in Camzyos, Sotyktu and the timing of pipeline investments. Acquired in-process R&D in the quarter was $600 million, which was partially offset by licensing income, resulting in an unfavorable net impact of $0.20 of EPS. The fourth quarter effective tax-rate was approximately 14.9%, driven primarily by earnings mix. Overall, earnings per share was $1.70 in the quarter and $7.51 for the full year.
Now, moving to the balance sheet and capital allocation on Slide 19. Our financial position remains strong, with approximately $12.6 billion in cash and marketable securities on hand as of December 31st, as we generate cash flow from operations of $4.3 billion in the fourth quarter. Through our strong financial discipline, we have been able to invest in our business and further expand our portfolio, maintain strong operating margins, pay-down debt and return significant cash to shareholders through share repurchases and dividends. Over the past three years, we've returned over $30 billion in shareholder distributions, including the dividend, which we've increased annually for 15 years in a row.
As you know, we're going to be taking on additional debt this year to finance our planned acquisitions of Karuna and RayzeBio. However, with our strong financial position, we plan to utilize our cash flow to pay-down our debt, as we've demonstrated in the past. Our plan is to repay approximately $10 billion of debt over the next two years to improve our leverage profile.
Before turning to our line-item guidance, let me close with our 2024 and non-GAAP guidance on Slide 20, which includes Mirati, but excludes the future impact of pending transactions, SystImmune, Karuna, RayzeBio. As we did in 2023, we are providing revenue guidance on a reported basis as well as on an underlying basis, which assumes currency remains consistent with prior year. We expect 2024 revenues to increase in a low single-digit range, reflecting our confidence in the growing momentum of our growth portfolio. Excluding foreign exchange, we expect revenues to increase in the low single-digit as well.
Driving our momentum this year will be increasing the sales in our growth portfolio from products like Opdivo and our recently launched products. As we said previously, we expect a more modest pace of growth than last year for Opdivo, with the potential for acceleration in the back-half of the year from new indications. And while our legacy portfolio includes assets that are maturing, we expect strong growth from Eliquis in the U.S. this year.
As it relates to quarterly progression of our sales, a few reminders. For products like Revlimid, Pomalyst and Camzyos, keep in mind the typical impact on sales in the first quarter due to patients entering the Medicare coverage gap early in the year. And for Eliquis, the coverage gap dynamic works in the opposite direction, where we expect sales in the first-half of the year to be higher than in the second-half.
As it relates to our line-item guidance for the year, we expect gross margin to be approximately 74%, which reflects an evolution of our sales mix and the non-recurrence of hedging gains from last year. Excluding in-process R&D, we expect our total operating expenses to increase in the low single-digit range, reflecting the additional costs of Mirati and the reallocation of costs and efficiency initiatives in MS&A as we continue to invest in our new product launches. This aligns with our previous operating margin target of at least 37%. This means we will remain focused on driving operational efficiencies across the organization, including portfolio prioritization to enable us to invest for growth, while maintaining high productivity.
We expect OI&E to be approximately $250 million of income, reflecting the PD1 royalty step-down in January from 6.5% to 2.5%, as well as the financing costs related to the Mirati acquisition. We project our tax-rate to be approximately 17.5%, reflecting an increase to the non-recurrence of one-time tax benefit that occurred in the third quarter of last year, plus the anticipated impact of Pillar 2. Finally, we expect to deliver non-GAAP earnings per share within the range of $7.10 and $7.40.
For clarity, our 2024 guidance excludes the three pending transactions. As a reminder, SystImmune is expected to add about $800 million in in-process R&D. Karuna is expected to be about $0.30 dilutive to earnings relating to financing costs as we plan to absorb the opex. And RayzeBio would be approximately $0.13 dilutive to earnings, with half in financing and the other half in opex. When we report in Q1 in April, we will update our guidance to reflect the deals that have closed at that time.
Before we move to the question-and-answer session, I want to thank all of our colleagues around the world for their hard work and dedication in 2023. This is an exciting time for BMS as we write a new chapter and maintain a singular focus on improving our growth profile over the course of the decade. I believe that our focused financial discipline, coupled with the strong cash flow generation, are key advantages that will enable us to further diversify our portfolio and invest in growth opportunities to deliver for patients and our investors.
I'll now turn the call back over to Tim and Chris for Q&A.