Jan. 31 (Bloomberg) -- Bristol-Myers Squibb Co. narrowed its loss in the fourth quarter as surging sales of its anti- clotting pill Plavix partially offset charges for costs that include investments backed by subprime securities.

The net loss was $89 million, or 5 cents a share. The company wrote off $275 million in investments in the quarter, which could rise to as much as $417 million, said Rebecca Goldsmith, a spokeswoman for the New York-based drugmaker, in a telephone interview today. It booked an unrealized pretax loss of $142 million, which may be ``temporary,'' she said.

Bristol-Myers joins the world's largest banks, who have written down more than $90 billion from their mortgage-related holdings. The value of the debt tumbled as defaults by borrowers with poor credit soared. The drugmaker's revenue rose 33 percent to $5.38 billion as sales of Plavix, its biggest seller, more than doubled.

``Some of the underlying collateral for the auction rate securities held by the company consists of sub-prime mortgages,'' the company said today in a statement. If credit and capital markets continue to deteriorate, Bristol-Myers said, it ``may incur additional impairments to its investment portfolio, which could negatively affect the company's financial condition, cash flow and reported earnings.''

Bristol-Myers fell 93 cents, or 4 percent, to $22.33 at 10:24 a.m. in New York Stock Exchange composite trading. The stock has fallen 19 percent in the 12 months through yesterday.

Subprime Fallout

While Bristol-Myers is the first drugmaker to report subprime costs, the crisis has also affected technology companies. Networking-equipment maker Ciena Corp. in December said its fourth-quarter profit included a $13 million loss tied to investments in commercial paper issued by structured investment vehicles. Lawson Software Inc. this month said profit was cut by 2 cents a share in charges to write down the value of auction-rate securities.

Bristol said its collateralized debt obligations were ``supported by pools of residential and commercial mortgages or credit cards, insurance securitizations and other structured credits, including corporate bonds'' and subprime mortgages.

Bristol-Myers also booked costs in the quarter of $292 million for restructuring and $230 million from its acquisition of Adnexus Therapeutics, the statement said.

Patent Challenge

The fourth-quarter loss compared with a loss of $134 million, or 7 cents a share, a year earlier, when cheaper Plavix copies reached the market during a patent dispute, the company said in a statement. Profit excluding some items was 35 cents, beating by 1 cent the 34-cent average estimate of 16 analysts surveyed by Bloomberg.

Bristol-Myers is recovering from the patent challenge that temporarily dumped cheaper generic copies of Plavix on the market. Plavix loses patent protection in 2012, which may cost Bristol-Myers $3 billion in annual revenue from generic rivals. That has spurred Chief Executive Officer James Cornelius to cut jobs and shut plants for $1.5 billion in savings.

Sales of Plavix, which Bristol-Myers co-markets with Sanofi-Aventis SA, more than doubled to $1.37 billion, including U.S. sales of $1.18 billion.

Apotex Inc., a Canadian generics maker, sold Plavix copies for three weeks in August 2006, distributing at least a six- month supply before a U.S. judge halted sales, protecting the drug from further competition until the end of 2011.

Focus on Drug Development

``We do see decent revenue growth for Bristol, the company is still going to benefit from Plavix,'' Linda Bannister, an analyst at Edward Jones & Co., said in a phone interview before today's release. ``It was down significantly in 2006. Generic Plavix has since been removed from the market.''

Bristol-Myers is also selling its medical imaging business and mulling the sale of other non-drug units Mead Johnson Nutritionals, the infant-formula division, and ConvaTec, its wound-care and ostomy subsidiary, to invest in developing new medicines for cancer, diabetes and blood clots.

``Pipeline focus is becoming increasingly important,'' James Kelly, an analyst with Goldman Sachs Group Inc., said in a Jan. 25 note to clients. Kelly expects Bristol-Myers to apply for U.S. approval of saxagliptin, an experimental diabetes pill, and ipilimumab, a melanoma medicine, in the first half of this year.

Revenue from the schizophrenia drug Abilify rose 28 percent to $462 million.

Sales of the AIDS medicine Reyataz climbed 31 percent to $334 million. Another AIDS therapy, Sustiva, grew 17 percent to $260 million, helped by sales of Gilead Sciences Inc.'s pill Atripla that combines the Bristol-Myers drug with other medicines.

Sprycel, Erbitux, Baraclude

The leukemia treatment Sprycel, approved last year, generated $56 million, up from $14 million a year ago. Sales of Ixempra, a chemotherapy drug for breast cancer approved in October, were $15 million.

The cancer treatment Erbitux, which Bristol-Myers markets in the U.S. with New York-based ImClone Systems Inc. generated $185 million, an 11 percent increase. The medicine is approved to treat colon cancer and tumors of the head and neck. German drugmaker Merck KGaA sells Erbitux in Europe.

Sales of Baraclude, a hepatitis B treatment, more than doubled to $99 million. Orencia, a rheumatoid arthritis medication approved in 2006, also more than doubled to $75 million. The blood-pressure medicines Avapro and Avalide rose 7 percent to $328 million.

Most of the drug sales benefited from foreign exchange gains, Bristol-Myers said.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net

Last Updated: January 31, 2008 10:27 EST