Bristol-Myers Matches Analyst Estimates on Plavix Sales Drop
Bristol-Myers Squibb Co. (BMY) said second-quarter profit fell in line with analyst expectations, as sales of the company’s top-selling drug Plavix plunged 60 percent after losing market exclusivity in May.
Net income dropped 28 percent to $645 million, or 38 cents a share, from $902 million, or 52 cents, a year earlier, the New York-based company said today in a statement. Excluding some items, profit was 48 cents a share, matching the average estimates of 16 analysts compiled by Bloomberg. Revenue fell 18 percent to $4.44 billion, also meeting analyst projections.
Sales rose by 8 percent to $3.59 billion, excluding the losses due to generic competition from the blood thinner Plavix and Avapro, a hypertension drug, the company said. Investors are watching to see whether Bristol-Myers’s newer products, including the cancer drug Yervoy, can replenish sales, said Barbara Ryan, an analyst with Deutsche Bank Securities.
“Investors remain focused on new product opportunities that can drive longer-term earnings per share growth,” she said in a note to clients before the results were released.
Bristol-Myers lowered its 2012 forecast for earnings excluding the effect of its planned acquisition of Amylin Pharmaceuticals Inc., to $1.78 to $1.88 a share from $1.90 to $2. The company also reiterated a forecast for profit excluding one-time items of $1.90 to $2.
The drugmaker rose less than 1 percent to $34.95 at 4 p.m. New York time.
The company is working to get answers to the U.S. Food and Drug Administration on Eliquis, the blood thinner Bristol-Myers is developing with Pfizer Inc. (PFE) The FDA in June rejected the pill, asking for more data.
Bristol-Myers may have an answer to regulators by September, Chief Scientific Officer Elliott Sigal said on a conference call with analysts today.
“We’re working ferociously to submit this application,” Sigal said. After that, “there could be up to a six-month review period, but the way the engagement is occurring, it’s possible the FDA won’t require that full six months.”
The FDA isn’t seeking new studies on the drug, and instead wants information for existing trials, the companies have said.
Eliquis, aimed at patients with heart arrhythmia, could generate $2.5 billion a year in sales by 2015 if approved, according to Tim Anderson, a Sanford C. Bernstein & Co. analyst in New York. Johnson & Johnson, of New Brunswick, New Jersey, and Leverkusen, Germany-based Bayer AG have a competing pill, Xarelto, as does Boehringer Ingelheim GmbH, of Ingelheim, Germany.
The company also plans to start a phase 3 clinical trial in lung cancer patients of its drug that uses the body’s immune system to attack cancer cells. That study will begin in August, Sigal said on the call today. Phase 3 is the last before the company would submit the drug for approval by the FDA.
Known as anti-PD-1 drugs, the medicine, BMS-936558, blocks an “off” switch in the immune system that otherwise keeps it from attacking cancer cells.
Bristol-Myers’s reiterated guidance means the company is successfully hedging against currency swings, said Mark Schoenebaum, an analyst with ISI Group in New York.
“We think maintaining guidance (especially revenue) is impressive given the changes in Fx this quarter,” Schoenebaum wrote in a note to clients today.
Bristol-Myers generates 65 percent of its revenue in the U.S., about 50 percent more than peers like Pfizer Inc. and Merck & Co. That leaves it less vulnerable to foreign currency fluctuations, Schoenebaum said.
Bristol-Myers has been acquiring companies and drugs to replace Plavix, which at its 2011 peak sold $7.09 billion a year. Sales of the medicine in the second quarter fell to $741 million from $1.87 billion in the same period last year.
Last month, the company agreed to buy Amylin for $5.3 billion, adding the diabetes drugs Bydureon and Byetta. Bristol- Myers’ own experimental diabetes drug, dapagliflozin, failed to win U.S. approval in January. That same month, Bristol-Myers bought Inhibitex Inc. and its hepatitis C drug for $2.5 billion. The company is racing to be first to market with a cure for the liver infection that doesn’t rely on injectable drugs.
“We have been preparing for the expected loss of exclusivity of Plavix and Avapro/Avalide for a number of years and I am pleased with our company’s progress,” said Chief Executive Officer Lamberto Andreotti in the statement. “We are building a strong foundation for success.”
Sales of Avapro, which lost patent protection in March, fell 53 percent to $117 million.
Yervoy, used to treat melanoma, is the first medicine to come to market from Bristol-Myers’s acquisition strategy. Its sales grew 71 percent to $162 million. The drug was acquired through Bristol-Myers’s purchase of Medarex Inc. in 2009 for $2.4 billion and won marketing clearance last year.
Quarterly revenue was also helped by sales of the leukemia treatment Sprycel, which increased 26 percent to $244 million. Sales of Baraclude, a treatment for hepatitis B, jumped 22 percent to $357 million, while rheumatoid arthritis treatment Orencia generated $290 million, a 27 percent increase.
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