Bristol-Myers Meets Estimates as Pipeline Remains Focus
Bristol-Myers Squibb Co. (BMY), losing its top-seller Plavix to generic competition next month, matched analyst estimates on sales of newer drugs as investors remain focused on the company’s pipeline.
Net income rose 12 percent to $1.1 billion, or 64 cents a share, from $986 million, or 57 cents, a year earlier, the New York-based company said today in a statement. Excluding certain items, profit was also 64 cents a share, matching an average of 17 analyst estimates compiled by Bloomberg. Revenue increased 4.8 percent to $5.25 billion.
The drugmaker has used mid-size acquisitions to replenish its supply of experimental medicines and prepare for the loss of Plavix, a blood thinner that made up 33 percent of 2011 revenue. In March, Amylin Pharmaceuticals Inc. (AMLN), the maker of the diabetes drug Bydureon, rejected Bristol-Myers’s $3.5 billion purchase offer. Last week, Bristol-Myers agreed to collaborate with Medivir AB (MVIRB) and Johnson & Johnson to test hepatitis C treatments.
“It’s pretty clear after last week that Bristol’s going to be a player in the segment, but what time frame and in what way can we expect?” Les Funtleyder, an analyst and portfolio manager with Miller Tabak & Co.
Shares of Bristol-Myers fell 1.6 percent to $33.76 at the close in New York. The company rose 20 percent in the 12 months.
He said investors are interested in how Bristol-Myers will build a business strategy for medicines that are near to reaching the market, led by the drugmaker’s new hepatitis C treatment and experimental blood thinner Eliquis.
Bristol-Myers’s experimental diabetes product, dapagliflozin, also called Forxiga, failed to win approval from U.S. regulators in January. The Food and Drug Administration asked the company for more data on the treatment being developed with London-based AstraZeneca Plc. (AZN) It’s awaiting approval in Europe and may be approved later in the U.S.
Bristol-Myers confirmed its previous 2012 earnings forecast of $1.90 a share to $2.00 a share. “This first quarter performance continues to demonstrate our ability to balance delivering strong financial results in the short term with positioning the company for long-term success,” Chief Executive Officer Lamberto Andreotti said in the statement.
Bristol-Myers’s strategy of mid-size partnerships and acquisitions is known as the “string of pearls.”
Melanoma Treatment Sales
Yervoy, used to treat melanoma, is the first drug from that strategy to come to market. It was acquired in Bristol-Myers’s purchase of Medarex Inc. in 2009 for $2.4 billion. The treatment, which gained U.S. approval last year, generated $154 million in first-quarter sales, the company reported.
In January, Bristol-Myers bought Inhibitex Inc. and its hepatitis C drug for $2.5 billion.
“We want to understand how that’s going to fit into things,” Funtleyder said. “There’s going to be some combination therapy, and it almost certainly requires some partnering, because not everybody’s going to have all that’s required,” he said.
While revenue from Plavix declined 4 percent to $1.69 billion, sales of the company’s newer drugs increased. In addition to Yervoy, Baraclude, a hepatitis B drug, gained 18 percent to $325 million, and Sprycel, a drug for chronic myeloid leukemia, increased sales 34 percent to $231 million.
Bristol-Myers is waiting for U.S. regulators to approve Eliquis, a blood-thinner developed with New York-based Pfizer Inc. (PFE) A decision is scheduled to come by June 28.
Hepatitis C Drugs
The company also is vying to develop the first of a new line of hepatitis C therapies that don’t rely on interferon, an immune-boosting shot given weekly for as long as a year that has flu-like side-effects. The new therapies are combinations of pills, not injections, and attack the virus directly to keep it from replicating.
Gilead Sciences Inc. (GILD), Abbott Laboratories (ABT) and Vertex Pharmaceuticals Inc. (VRTX) are competing with Bristol-Myers to be first to market. Gilead’s drug, called 7977, was tested in combination with Bristol-Myers’s daclatasvir and cured 93 percent of patients, according to a study released this month. Gilead hasn’t committed to taking the combination further in trials.
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