Bristol-Myers Tops Estimates on Cancer, Hepatitis C Sales

  • Cancer drug Opdivo brings in $305 million, beating estimates
  • Company raises full-year earnings outlook for third time

Bristol-Myers Squibb Co., a drugmaker increasingly focused on developing new cancer treatments, beat third-quarter profit estimates on better-than-expected revenue from its oncology drug Opdivo and the start of U.S. sales for its hepatitis C drug.

Third-quarter earnings, excluding one-time items, were 39 cents a share, beating the 35-cent average of analysts’ estimates compiled by Bloomberg. Sales rose 3.7 percent from a year earlier to $4.07 billion. Analysts had estimated $3.86 billion on average.

The New York-based company also raised its full-year sales forecast to a range of $16 billion to $16.4 billion, from a prior projection of $15.5 billion to $15.9 billion, and increased its full-year adjusted earnings forecast to $1.85 to $1.90 a share, from a previous estimate of $1.70 to $1.80 a share. It’s the third time Bristol-Myers has raised its earnings projections this year.

Bristol-Myers has pegged its future on cancer treatments that use the body’s immune system to attack tumors. It already sells Opdivo for lung and skin cancer, and is studying the drug in other malignancies, like kidney cancer. Opdivo had sales of $305 million in the third quarter, compared with the average estimate of $243.4 million. That drug is expected to bring in $5.4 billion of sales by 2018.

The company’s other immune-based cancer therapy didn’t fare as well in the quarter. Yervoy, which treats melanoma, fell 31 percent from a year earlier to $240 million, coming in below the average projection of $282 million. The company also announced that Yervoy’s final-stage trial in combination with chemotherapy drugs failed to boost survival in patients with a certain form of lung cancer and has been discontinued. That drug is projected to be a $1.6 billion treatment by 2018.

The introduction of other immune system-based cancer therapies, including Opdivo, has hurt Yervoy sales. Revenue from the drug should get a boost from its combination with Opdivo, approved for use in melanoma patients earlier this month in the U.S.

Hepatitis Drugs

Bristol-Myers’ hepatitis C franchise had a stronger-than-expected quarter, reaping $402 million in sales and beating estimates of $257 million. It was the first quarter of sales in the U.S. for the drug Daklinza, which is used in combination with Gilead’s Sovaldi. Demand came from the U.S. Department of Veterans Affairs as well as wholesalers stocking up on the new combination.

The blood thinner Eliquis, which had a rocky start in 2013, had sales of $466 million, missing the average estimate of $479.3 million. Bristol-Myers sells that drug with Pfizer Inc.

Bristol-Myers "remains the highest-expectation, highest-valuation stock in our coverage," said Tim Anderson, an analyst at Sanford C. Bernstein & Co. Competition from Merck & Co., Roche Holding AG and AstraZeneca Plc may temper Bristol’s advantage, "yet, it still remains very well positioned and is likely to be the best ‘growth stock’" in that area, he said.

The shares rose 2.2 percent to $65.98 at 9:43 a.m. in New York. They had risen 9.4 percent this year through Monday.

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