Executive Summary

Bristol-Myers Squibb Company (which may be referred to as Bristol-Myers Squibb, BMS or the Company) is a global biopharmaceutical and nutritional products company whose mission is to extend and enhance human life by providing the highest quality biopharmaceutical and nutritional products. The Company is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceuticals and nutritional products. The Company has two reportable segments-BioPharmaceuticals and Mead Johnson. The BioPharmaceuticals segment consists of the global biopharmaceutical and international consumer medicines business, which accounted for approximately 87% of the Company's net sales. The Mead Johnson segment consists of the Company's approximately 83% interest in the publicly traded Mead Johnson Nutrition Company (Mead Johnson), which is primarily an infant formula and children's nutrition business, and which accounted for approximately 13% of the Company's net sales.

Financial Highlights

The following table is a summary of operating activity:



                                         Three Months Ended September 30,               Nine Months Ended September 30,
Dollars in Millions                       2009                      2008                  2009                   2008
Net Sales                            $         5,487           $         5,254       $       15,886         $       15,348
Gross Margin                                   3,925                     3,620               11,450                 10,474
Gross Margin as a percentage of
sales                                             72 %                      69 %                 72 %                   68 %
Net Earnings from Continuing
Operations                                     1,290                       847                3,509                  2,687

Net Sales

The Company's net sales increased 4% despite a 3% unfavorable foreign exchange impact for the three months ended September 30, 2009 and increased 4% despite a 4% unfavorable foreign exchange impact for the nine months ended September 30, 2009. PLAVIX* (clopidogrel bisulfate) and ABILIFY* (aripiprazole) continue to drive sales growth with sales increases of 8% and 16% for the three months ended September 30, 2009, respectively, and 10% and 22% for the nine months ended September 30, 2009, respectively. Significant contributions to sales growth were also provided by the HIV portfolio (the SUSTIVA Franchise (efavirenz) and REYATAZ(atazanavir sulfate)), BARACLUDE (entecavir), ORENCIA (abatacept) and SPRYCEL (dasatinab). ERBITUX* (cetuximab) sales were down 3% and 9% for the three and nine months ended September 30, 2009, respectively.

On July 31, 2009, the Company received approval from the FDA for ONGLYZA (saxagliptin), a DPP-IV inhibitor, and in the third quarter of 2009, the Company launched ONGLYZA in the United States and Mexico. In October 2009, the Company launched ONGLYZA in the Eurpoean Union (EU).

Net Earnings

The increase in net earnings from continuing operations for the three and nine months ended September 30, 2009 was attributed to sales growth, improvement in gross margins and cost improvements in marketing, selling and administrative due to productivity transformation initiative (PTI) savings. Gross margin improvement is attributed to realized manufacturing savings including those from the Company's PTI, favorable foreign exchange impact, cost improvements, favorable product mix and price increases.

Strategy

The Company continues to execute its multi-year strategy to transform into a next-generation biopharmaceutical company. The strategy encompasses all aspects and all geographies of the business and will yield substantial cost savings and cost avoidance and increase the Company's financial flexibility to take advantage of attractive market opportunities that may arise.

As part of the Company's strategy, in the first quarter of 2009 its subsidiary Mead Johnson completed an initial public offering of its Class A common stock. Net proceeds received were $782 million. Post initial public offering (IPO), the Company holds an 83.1% interest in Mead Johnson and 97.5% of the combined voting power of the outstanding common stock. In addition, the Company extended its ABILIFY* comarketing agreement in the U.S. and entered into an oncology collaboration in the U.S., Japan and the European Union (EU) markets with Otsuka Pharmaceutical Company Ltd. (Otsuka) in April 2009.

The Company is also reallocating resources to continue its string of pearls strategy and enable strategic transactions, which could range from collaboration and license agreements to the acquisition of companies. In September 2009, the Company completed its acquisition of Medarex, Inc. (Medarex) for an aggregate purchase price of approximately $2.3 billion. Also in September, the Company announced the sale of its mature brands business in the Asia-Pacific region, excluding China and Japan, and shares of the Company's Indonesian subsidiary to Taisho Pharmaceutical Company Ltd. for $310 million. The closing of the transaction is expected to occur during the fourth quarter of 2009. In October, the Company completed the sale of its mature pharmaceutical brands and manufacturing facility in Australia to Sigma Pharmaceuticals Limited for $62 million.

Managing costs is another part of the Company's overall strategy. The Company's announced PTI is designed to create a total of $2.5 billion in annual productivity savings and cost avoidance by 2012. The charges associated with the PTI are estimated to be in the range of $1.3 billion to $1.6 billion, which includes $1.1 billion of costs already incurred.

The Company will continue to focus on the development of its BioPharmaceuticals business and will maintain growth by investing in research and development as well as in key growth products, including specialty and biologic medicines and cardiovascular and metabolic drugs. The Company launched ONGLYZA in the U.S. and Mexico in the third quarter of 2009 and in the EU in October 2009.

Product and Pipeline Developments

Belatacept

• In September, the Company announced that the U.S. Food and Drug Administration (FDA) has accepted, for filing and review, the Company's submission of a biologic license application for belatacept, which is under development for use in kidney transplantation. The Prescription Drug User Fee Act (PDUFA) goal for FDA action is May 1, 2010.

Dapagliflozin

• In October, the Company announced results from a 24-week Phase III clinical study, which demonstrated that the investigational drug dapagliflozin, added to metformin, provided significant mean reductions in the primary endpoint, glycosylated hemoglobin level (HbA1c) and in the secondary endpoint, fasting plasma glucose (FPG) in patients with type 2 diabetes inadequately controlled with metformin alone, as compared to placebo plus metformin. The study also showed that individuals receiving dapagliflozin had statistically greater mean reduction in body weight compared to individuals taking placebo.

Apixaban

• In July, the results of the apixaban ADVANCE-2 study were presented at a late-breaking clinical trial session at the Congress of the International Society of Trombosis and Hemostasis. The study's results demonstrated that apixaban was superior to the European regimen of enoxaparin (standard of care) for reducing the risk of venous thromboembolism in patients undergoing total knee replacement surgery and showed lower observed bleeding rates compared to enoxaparin. The study also showed that the overall safety profile for apixaban was similar to enoxaparin.

ERBITUX*

• In September at the European Cancer Organisation and European Society of Medical Oncology Multidisciplinary Congress, data was presented on two Phase III ERBITUX* studies in first-line metastatic colorectal cancer patients. A retrospective analysis of the Phase III CRYSTAL study demonstrated that ERBITUX*, when added to a FOLFIRI chemotherapy regimen, was shown to increase median overall survival in first-line metastatic colorectal cancer (mCRC) patients compared to those receiving FOLFIRI alone. In a subset of patients with wild-type K-ras tumors, median overall survival was increased to 23.5 months in patients who received ERBITUX* plus FOLFIRI compared to 20 months for those taking FOLFIRI alone. Another Phase III study of ERBITUX* plus chemotherapy (primarily capecitabine plus oxaliplatin) in first-line mCRC, known as COIN, was conducted in the UK by the Medical Research Council. The COIN study did not meet its primary endpoint of overall survival.

• In July, the Company and Eli Lilly and Company (Lilly) announced that the FDA had approved revisions to the U.S. prescribing information for ERBITUX* concerning the treatment of patients with an epidermal growth factor receptor (EGFR)-expressing metastatic colorectal cancer (mCRC). The labeling revisions include a modification which states that ERBITUX* is not recommended for patients whose tumors had K-ras mutations in codon 12 or 13. An estimated 40% of patients with mCRC have K-ras mutations while approximately 60% have a wild-type K-ras gene.

PLAVIX*

• In August, the OASIS study group presented initial results of the CURRENT-OASIS 7 clinical trial at the European Society of Cardiology congress in Barcelona. The large-scale, global study provided information about an intensified dose-regimen of PLAVIX* in acute coronary syndrome (ACS) patients intending to undergo angioplasty. The study showed no added benefit on the composite primary end-point (cardiovascular death, heart attack or stroke at 30 days) with the higher dose when the entire ACS study population was considered. For clinically relevant subgroups pre-specified for preliminary analysis, such as the percutaneous coronary intervention (PCI) group (70% of the trial population), potentially medically relevant differences in patient outcomes were observed. Analysis showed an improvement in outcome for patients taking the higher PLAVIX* dose regimen (600 mg loading/150 mg for days 2- 7/75 mg for days 8-30) over the standard dose regimen (300 mg loading/75 mg for days 2-30), as shown by a 15% reduction of the same composite end-point of cardiovascular death, heart attack and stroke.

ONGLYZA

• In October, the Company and AstraZeneca PLC (AstraZeneca) announced that the European Commission has granted marketing authorization for ONGLYZA, a dipeptidyl peptidase-4 inhibitor, in all 27 countries of the European Union to treat type 2 diabetes with either metformin, a sulfonylurea or a thiazolidinedione, when any of these other agents alone, with diet and exercise, does not provide adequate glycemic control.

• In October, the Company announced results of the 18-week Phase IIIb study in adults with type 2 diabetes with inadequate glycemic control on metformin therapy alone found that the addition of ONGLYZA 5mg per day to metformin treatment achieved the primary objective of demonstrating non-inferiority compared to the addition of JANUVIA*(sitagliptin) 100mg per day to metformin treatment in reducing HbA1c from baseline.

• In July, the Company and AstraZeneca announced that the FDA approved ONGLYZA. ONGLYZA is indicated as an adjunct to diet and exercise to improve blood sugar (glycemic) control in adults for the treatment of type 2 diabetes mellitus. ONGLYZA once daily can be used in combination with commonly prescribed oral anti-diabetic medications, metformin, sulfonylureas or thiazolidiones, or as a montherapy to significantly reduce glycosylated hemoglobin levels.

ORENCIA

• In October, the Company announced that new clinical data support continued development of a subcutaneous administration of ORENCIA for patients with moderate to severe rheumatoid arthritis. The subcutaneous program utilizes a new formulation of ORENCIA, which has been specifically designed for subcutaneous administration. These data, from a 4-month open-label trial involving 100 patients, were presented at the American College of Rheumatology Annual Scientific Meeting. The study showed that weekly administration of a 125 mg subcutaneous dose of ORENCIA resulted in minimal, transient immunogenicity prior to Month 4 after repeat dosing. The immunogenicity was similar whether ORENCIA was administered in combination with methotrexate, a common treatment for rheumatoid arthritis, or as a monotherapy. At Month 4, patients had no antibody response to subcutaneous ORENCIA.

• In October, the Company announced two-year results of a study that supports use of ORENCIA for methotrexate-naοve patients with moderate to severe rheumatoid arthritis of less than or equal to two years duration. The data from the AGREE study, which compared patients treated with ORENCIA plus methotrexate versus patients treated with methotrexate alone, show that patients taking ORENCIA in combination with methotrexate achieved sustained low disease activity scores at 24 months. The data also showed that ORENCIA plus methotrexate can inhibit radiographic progression of rheumatoid arthritis and improve physical function in addition to relieving pain, swelling and fatigue. The safety profile for the open-label period was similar to the double-blind period of the study.

• In August, the Company announced that clinical data added to the labeling for ORENCIA support use of ORENCIA for patients with moderate to severe rheumatoid arthritis of less than or equal to two years duration. The efficacy and safety data further support use of ORENCIA in new-to-biologic patients with moderate to severe rheumatoid arthritis.

Three Months Results of Operations

The Company's results of continuing operations exclude the results related to the ConvaTec and the Medical Imaging businesses prior to their respective divestitures in 2008. These businesses have been segregated from continuing operations and included in discontinued operations for the three months ended September 30, 2008, refer to "Item 1. Financial Statements-Note 7. Discontinued Operations" for further discussion.

The Company's results of operations were as follows:

                                                         Three Months Ended September 30,
Dollars in Millions                                    2009             2008          % Change
Net Sales                                           $     5,487       $   5,254              4 %
Earnings from Continuing Operations before
Income Taxes                                        $     1,724       $   1,155             49 %
% of net sales                                             31.4 %          22.0 %
Provision for Income Taxes                          $       434       $     308             41 %
Effective tax rate                                         25.2 %          26.7 %
Net Earnings from Continuing Operations             $     1,290       $     847             52 %
% of net sales                                             23.5 %          16.1 %
Net Earnings from Discontinued Operations           $         -       $   1,990           (100 )%
Net Earnings Attributable to Noncontrolling
Interest                                            $       324       $     259             25 %
% of net sales                                              5.9 %           4.9 %
Net Earnings Attributable to Bristol-Myers
Squibb Company                                      $       966       $   2,578            (63 )%
% of net sales                                             17.6 %          49.1 %

The composition of the change in net sales was as follows:

                         Three Months Ended September 30,                 2009 vs. 2008
                                     Net Sales                         Analysis of % Change
                                                                Total                     Foreign
Dollars in Millions         2009                  2008          Change   Volume   Price   Exchange
U.S.                  $           3,256     $           2,983     9%       1%      8%        -
Non-U.S.                          2,231                 2,271    (2)%      3%      2%       (7)%

Total                 $           5,487     $           5,254     4%       2%      5%       (3)%

The increase in U.S. net sales was driven by growth in key U.S. biopharmaceutical products, which are described below in further detail. Decreases in international net sales were primarily due to a strengthening U.S. dollar relative to certain foreign currencies, especially the euro and U.K. pound, and generic competition for PLAVIX* in the EU and certain mature brands. These decreases were partially offset by growth in certain key products, such as BARACLUDE, the HIV portfolio, SPRYCEL and ORENCIA.

In general, the Company's business is not seasonal. For information on U.S. biopharmaceutical prescriber demand, reference is made to the table within "-BioPharmaceuticals" below, which sets forth a comparison of changes in net sales to the estimated total prescription growth (for both retail and mail order customers) for certain key biopharmaceuticals products and new products sold by the U.S. BioPharmaceuticals business. The U.S. and non-U.S. net sales are based upon the location of the customer.

The Company operates in two reportable segments-BioPharmaceuticals and Mead Johnson. The Company's net sales by operating segment were as follows:

                                         Three Months Ended September 30,
                                    Net Sales                     % of Total Net Sales
   Dollars in Millions     2009        2008      % Change         2009             2008
   BioPharmaceuticals    $   4,788   $   4,510          6 %         87.3 %           85.8 %
   Mead Johnson                699         744         (6 )%        12.7 %           14.2 %

   Total                 $   5,487   $   5,254          4 %        100.0 %          100.0 %

The Company recognizes revenue net of various sales adjustments to arrive at net sales as reported in the consolidated statements of earnings. These adjustments are referred to as gross-to-net sales adjustments. The reconciliation of the Company's gross sales to net sales by each significant category of gross-to-net sales adjustments was as follows:

                                                         Three Months Ended September 30,
Dollars in Millions                                       2009                      2008
Gross Sales                                          $         6,184           $         5,952
Gross-to-Net Sales Adjustments
Prime Vendor Charge-Backs                                       (141 )                    (129 )
Women, Infants and Children (WIC) Rebates                       (187 )                    (202 )
Managed Health Care Rebates and Other Contract
Discounts                                                       (112 )                     (93 )
Medicaid Rebates                                                 (50 )                     (52 )
Cash Discounts                                                   (74 )                     (78 )
Sales Returns                                                    (48 )                     (69 )
Other Adjustments                                                (85 )                     (75 )

Total Gross-to-Net Sales Adjustments                            (697 )                    (698 )

Net Sales                                            $         5,487           $         5,254

Gross-to-net sales adjustments remained flat. Sales returns decreased 30% primarily due to lower sales return charges for certain mature brands. Managed health care rebates and other contract discounts increased by 20%, primarily due to higher PLAVIX* Medicare sales and an increase in contractual discount rates. Medicaid rebates decreased by 4% due to the recovery of net overpayments related to the three year period 2002 through 2004 offset by higher rebates. See "-Nine Months Results of Operations" for further discussion.

BioPharmaceuticals

The composition of the change in biopharmaceutical net sales was as follows:



                         Three Months Ended September 30,                 2009 vs. 2008
                                     Net Sales                         Analysis of % Change
                                                                Total                     Foreign
Dollars in Millions         2009                  2008          Change   Volume   Price   Exchange
U.S.                  $           3,021     $           2,708    12%       3%      9%        -
Non-U.S.                          1,767                 1,802    (2)%      5%       -       (7)%

Total                 $           4,788     $           4,510     6%       4%      5%       (3)%

U.S. biopharmaceutical net sales increased primarily due to increased sales of PLAVIX*, ABILIFY*, the HIV portfolio and ORENCIA. International biopharmaceutical net sales decreased as a result of unfavorable foreign exchange rates due to the strengthening U.S. dollar and decreased PLAVIX* sales, which more than offset increased sales of BARACLUDE, the HIV portfolio, SPRYCEL, ORENCIA and ABILIFY*. The Company's reported international net sales do not include copromotion sales reported by its alliance partner, sanofi-aventis (sanofi) for PLAVIX* and AVAPRO*/AVALIDE* (irbesartan/irbesartan-hydrochlorothiazide).

Net sales of key biopharmaceutical products represent 81% and 78% of total biopharmaceutical net sales in the third quarter of 2009 and 2008, respectively. The following table details U.S. and international biopharmaceuticals net sales by key products, percentage change from the prior period, as well as the foreign exchange impact when compared to the prior period. Commentary detailing the reasons for significant variances for key products is provided below:

                                                       Three Months Ended September 30,
                                                                                          % Change
                                                                                      Attributable to
Dollars in Millions                        2009          2008        % Change         Foreign Exchange
Cardiovascular
PLAVIX*
U.S.                                     $   1,406     $   1,263           11 %                        -
Non-U.S.                                       148           176          (16 )%                    (5 )%
Total                                        1,554         1,439            8 %                     (1 )%
AVAPRO*/AVALIDE*
U.S.                                           186           189           (2 )%                       -
Non-U.S.                                       143           145           (1 )%                    (6 )%
Total                                          329           334           (1 )%                    (2 )%
Virology
REYATAZ
U.S.                                           186           176            6 %                        -
Non-U.S.                                       174           166            5 %                     (9 )%
Total                                          360           342            5 %                     (4 )%
SUSTIVA Franchise (total revenue)
U.S.                                           195           185            5 %                        -
Non-U.S.                                       120           109           10 %                    (10 )%
Total                                          315           294            7 %                     (4 )%
BARACLUDE
U.S.                                            41            36           14 %                        -
Non-U.S.                                       150           108           39 %                     (6 )%
Total                                          191           144           33 %                     (4 )%
Oncology
ERBITUX*
U.S.                                           175           182           (4 )%                       -
Non-U.S.                                         4             2          100 %                     (5 )%
Total                                          179           184           (3 )%                       -
SPRYCEL
U.S.                                            28            21           33 %                        -
Non-U.S.                                        79            61           30 %                    (11 )%
Total                                          107            82           30 %                     (8 )%
IXEMPRA
U.S.                                            26            24            8 %                        -
Non-U.S.                                         2             1          100 %                     N/ A
Total                                           28            25           12 %                     (1 )%
Neuroscience
ABILIFY*
U.S.                                           520           435           20 %                        -
Non-U.S.                                       133           129            3 %                     (9 )%
Total                                          653           564           16 %                     (2 )%
Immunoscience
ORENCIA
U.S.                                           126            97           30 %                        -
Non-U.S.                                        36            22           64 %                    (11 )%
Total                                          162           119           36 %                     (2 )%
Metabolics
ONGLYZA
U.S.                                            20             -           N/ A                     N/ A
Non-U.S.                                         -             -           N/ A                     N/ A
Total                                           20             -           N/ A                     N/ A

• U.S. net sales increased primarily due to higher average selling prices and increases in demand. Estimated total U.S. prescription demand increased approximately 4%.

• International net sales were negatively impacted by the August 2008 launch in Germany of a clopidogrel alternative salt (clopidogrel besylate) and subsequent launches of other generic clopidogrel products in the EU. International net sales are expected to continue to be negatively impacted by such generic competition.

• See "Item 1. Financial Statements-Note 23. Legal Proceedings and Contingencies-PLAVIX* Litigation."

AVAPRO*/AVALIDE* (known in the EU as APROVEL*/KARVEA*) - an angiotensin II receptor blocker for the treatment of

. . .