By Jacob Wolinsky. Originally published at ValueWalk.
CNBC’s Jim Cramer interviews Bristol Myers Squibb Chairman and CEO Giovanni Caforio from CNBC’s Healthy Returns Summit today
Q1 2020 hedge fund letters, conferences and more
Interview With Bristol Myers Squibb CEO Giovanni Caforio
JIM CRAMER: We’re here with Dr. Giovanni Caforio, who is chairman and CEO of Bristol Myers Squibb and chairman of PhRMA. Thank you so much for joining us for CNBC’s Healthy Returns. Dr. Giovanni, how did we get here? I need your advice. The world needs your advice. You’re a doctor. You’re head of a major pharmaceutical company. And it’s a scary time. And the only people we have to look to are people like you who are being thrust into a position — you’re a CEO, but now you’re much more than that. What do we do? What do we tell our kids?
GIOVANNI CAFORIO: Jim, thanks for having me during these really important times. So first of all, let me say, I am a physician. I’m a believer in science and so I’m optimistic. When you look at the polls, the public is really counting on the government and the industry during this time of crisis, and the biopharmaceutical industry can play and is playing a really important role. That’s who we are and this is what we do. We’ve had health crises before, and we’ve been able to work together and develop the right medicines and the right vaccines to overcome issues. And this is what we are doing now. I see an unprecedented level of cooperation between companies in our industry.
We are working with the FDA, the National Institutes of Health, the Gates Foundation. We’re coming together to bring resources and expertise together, and we are making great progress already in a short period of time. For us, at Bristol Myers Squibb as a leader in the industry, we are also playing an important role, and it really is for every patient, not just for patients infected and impacted by COVID. We are accelerating the pipeline medicines that can be helpful in the treatment of some of the effects of the disease. We’re helping patients with our medicines. And, of course, we’re very present with helping our communities everywhere we can. So I can say I am really optimistic about how we are coming together to manage this crisis.
JIM CRAMER: I don’t want to create any false optimism. I feel that from the very beginning we were behind. When I say “we,” I mean this is such a terrible illness. We didn’t seem to be able to realize how nefarious it was. Do you think we’ve caught up to it? Do you think that we’re on to this — to this terrible illness and we’re starting to see what terrible things it can do and we’re going to be able to blunt them?
GIOVANNI CAFORIO: Well, first of all, one of the things that we are doing is we are — we are learning. The adaptability and the ability to learn from experience is really important today. I think it’s going to be incredibly important going forward. There is progress with the development of diagnostics. That is a critical component. And also we are seeing companies in our industry come together to start clinical trials with potential new treatments for the disease. So the same is true for vaccines. And so I believe we are making progress. It will take some time. At the same time, I believe it really is important to continue to work together. In our industry we have a lot of experience and we’re bringing that to the table in order to advance the solution to this very terrible pandemic, as you said.
JIM CRAMER: Now, for example, I know we have done work with Glaxo and Sanofi. They’re not friends, but they’re teaming up. You’re giving away a thousand compounds in your discovery library. I mean, that’s sacred stuff. But you’re just opening it up because you want to solve this — solve this pandemic.
GIOVANNI CAFORIO: Yeah, Jim, we’re doing a number of things. So we did make a thousand compounds from our library available to external researchers to investigate whether they can have a role to play. We also have a number of medicines that are on the market already that can be tested because they’re potentially active against some of the inflammatory symptoms of the disease that are so severe. And we’re working with other companies to really shape clinical trials together. We are also, as an industry, beginning to look at manufacturing capacity so that we can bring that together when a new treatment is developed and is proven to be effective with patients. And so there is a lot going on, but I think what’s also important is to continue to really focus on every patient.
And so in our case at Bristol Myers Squibb, for example, we took action early on. We understand that because of the economic consequences of disease, patients may struggle. We wanted to make sure that no patient had issues accessing one of our existing medicines, and so we expanded our patient support program early on in the U.S. so that any patient that has lost the job and potentially healthcare coverage because of the pandemic, they will receive Bristol Myers Squibb medicines for free. o there are multiple ways in which a company like ours is taking a leadership role in helping with the pandemic and they go all the way from research through the medicines that are already approved in the marketplace.
JIM CRAMER: Let’s talk about people. I’ve gotten to know you. I know the people — pretty much every single age of pharma and the people before you. I’ve always felt that the industry attracted some of the greatest minds, driven people. Bob Hugin, the man who really made Celgene take off before he bought that. Fabulous guy. I’ve known the — Roy Vagelos, I knew of him at Merck. I mean, these have always been amazing people and yet the industry has gotten bad name after bad name after bad name. Why did it take a pandemic for people to figure out who you really were and who you are? Because you’re the same people the whole time. You’ve always felt like this. Now you’re given a chance, but why did it take this? Why didn’t people know that you guys are the good guys?
GIOVANNI CAFORIO: Well, Jim, let me say first of all that we have been focusing on patients for a long time. And the innovation that has been developed thanks to the work of our researchers and the people in our industry has helped address so many diseases over the years, from HIV/AIDS to hepatitis C and, of course, infectious diseases from MRSA and SARS and influenza. I know that it’s increased appreciation for the role we play. I think it’s really important. We have a major role to play in addressing this epidemic. And the level of cooperation between our companies in the industry, it’s really unprecedented this time. The level of resources, expertise we’re bringing to the table, the way in which we’re working together with other stakeholders, I think that is unprecedented, and I’m seeing great progress already.
So I know that we’re all focusing on patients and we’re trying to make progress as soon as possible. But that’s really who we are as an industry. That’s what we do. It’s the same mission that animates Bristol Myers Squibb. We’ve never stopped working during the entire pandemic. Our essential workers have remained in our manufacturing plants, and we’ve continued to deliver medicines to patients around the world. We’ve continued to focus on advancing our pipeline because there are new medicines that will be needed by patients in the future, and I’m really proud of what our people at Bristol Myers Squibb and across the industry, what we’re accomplishing.
JIM CRAMER: Well, thank you for what you’re doing for Bristol Myers Squibb because I think that you’ve got — a big position. I think you’ve got the most underappreciated pipeline. Now, maybe that’s because of the merger with Celgene. Maybe people didn’t realize some of the things you’re working with. But maybe you can just tell the audience the pipeline is full and it looks to me like you have many very big drugs that we’re going to see in the next four or five years.
GIOVANNI CAFORIO: Well, Jim, thank you. First of all, as you know, just a few days ago, we reported our first quarter results. It was a really important quarter because it was the first quarter for the new Bristol Myers Squibb after the acquisition of Celgene. It was a great quarter. We had $10.8 billion in sales for the quarter, which represents pro forma growth of 8 percent for our business. We did well across the board. I’m really proud of how our people are continuing to execute during this time.
The great thing about the quarter was the progress we made with the pipeline. We had the approval of a very important medicine, Zeposia, ozanimod, that you know well, Jim, and it was approved by the FDA, patients with multiple sclerosis. We had the approval of another medicine called Reblozyl, which is really important for patients with myelodysplastic syndrome. These are patients that have anemia, and there has been no new medicine approved for many, many years. That was approved by the FDA.
We advanced Opdivo with two positive Phase 3 clinical trials of kidney cancer and a really serious form of lung cancer called mesothelioma. I am really proud of the progress we’re making with the pipeline and we’re executing really, really well. You know we are in the middle of an integration, and actually the integration has been accelerated by what has happened because as we work together remotely and focusing on helping patients during the difficult time, our people have come together even faster. We’re creating one culture for the new company really, really well. So the pipeline is progressing really well. Bristol Myers Squibb is a leading biopharma company and we’re very well-positioned for the future.
JIM CRAMER: Giovanni, you have a drug that I think is radically underappreciated. It’s something quite unusual I think in pharma. It’s a vastly superior drug to others in its category. And yet people — it took a little while, maybe five, six years to recognize Eliquis. I think it is best in class. I don’t — tell me why that shouldn’t have 100 percent of the market when you look at the data.
GIOVANNI CAFORIO: Well, Eliquis is a — is a really important medicine. It’s one of the most important medicines for Bristol Myers Squibb. More importantly, it’s the leading medicine around the world for the prevention of stroke in patients with atrial fibrillation. It’s a very serious condition that affects millions of patients. And Eliquis is the market leader because it has a best-in-class profile in terms of efficacy and safety. It’s being adopted increasingly everywhere in the world, not just in the U.S. It’s the number one new oral anticoagulant in the United States in growing number of countries around the world. And there is more potential for growth in fact because really of the strong efficacy and good safety of Eliquis we’re seeing continued growth and there is further opportunity in the future.
There are many patients that are not being treated appropriately yet, and in fact, there are many patients with atrial fibrillation that have not yet been diagnosed effectively. We are partnering with technology companies, one Fitbit in particular, where we are experimenting with devices that can help early diagnosis of atrial fibrillation. So Eliquis is doing really well. It’s the number one new oral anticoagulant in the world, but there is significant opportunity to continue to grow in the future. It’s one of the most important medicines in our portfolio.
JIM CRAMER: Well, when you bought Celgene, all I kept hearing was it’s Revlimid, it’s going to go off patent; it’s not going to be able to be something that is going to be long-lasting; and the rest of the stuff is not worth anything. You’re proving right now that that — that the view on both Revlimid and on the other compounds is wrong.
GIOVANNI CAFORIO: You know, Jim, I’m really proud of our people and everything we’ve accomplished since the acquisition. The performance of the business has continued to be really strong across the board on all value drivers for the acquisition where we are executing well. The pipeline is progressing. The approvals of new medicines in the first quarter are really a demonstration of the strong focus we have on the pipeline. We’re also doing well from an integration perspective and we are on track with the $2.5 billion in synergies during the first three years. The company’s in a really strong financial flexibility with lots — financial position with lots of flexibility. So the execution in the new company’s really strong and I believe that as a leading biopharma company, we’re very well-positioned. So the pipeline is doing quite well.
JIM CRAMER: Now, I know that you talked about science and government, and I think a lot of people in America are discovering — rediscovering science. When we were going to school when we were little, we knew that the scientists were the smart ones. We knew we all wanted to be scientists but not everybody was smart enough. And then we got diverted, a lot of people went to law school, they went to business school, then they went into social media. Do you think it’s possible, Doctor, that what is happening right now is people are rediscovering the basic goodness of science and making a difference, making not just money but a difference?
GIOVANNI CAFORIO: Well, Jim, you know, this is — this is what we do at Bristol Myers Squibb and in companies in our industry. It’s about science and it’s about innovation and bringing new medicines to patients. So, of course, we are enthusiastic about what we can do. Particularly in a time when there is a health crisis, we are even more focused on bringing our work forward and making a difference — and making a difference for patients. I’m a physician by training. I’ve been in this industry over 30 years. I can tell you every time I have an opportunity to speak to a patient, it gives me extra energy and it motivates me to continue to work.
I am hearing from so many patients these days. Even if I’m working remotely, patients are reaching out to tell us they really value what we do. And so, this is a time for our industry and companies like Bristol Myers Squibb to step up to the challenge, work together, and demonstrate what we are capable of when we work together. That’s our industry, that’s what we stand for, that’s what we are, and this is a time in which the value of science and innovation is becoming very clear. As you mentioned, it is a difficult time and we should not underestimate the challenges of the current situation, but ultimately it will be science that helps us solve the issues we’re facing today.
JIM CRAMER: Well, I don’t want to put you totally on the spot, but do you think there ever will be a vaccine for COVID?
GIOVANNI CAFORIO: You know, Jim, as you know, Bristol Myers Squibb is — does not have a focus on vaccines. I do know that many companies in our industry do and they are working together, not only between companies to develop a vaccine faster, to learn from each other, to make sure the right manufacturing capacity is available. There is cooperation with various institutions around the world. Clearly in the U.S., there is a lot of activity. It will take time. But I am confident that we will have a vaccine developed.
JIM CRAMER: All right. Thank you so much. Thanks to Giovanni Caforio for joining us at CNBC’s Healthy Returns Summit.
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