Bloomberg News

Bristol-Myers Tops Third-Quarter Profit Estimate on Sales

October 27, 2011

(Updates with closing share price in sixth paragraph.)

Oct. 27 (Bloomberg) -- Bristol-Myers Squibb Co., the drugmaker whose best-selling blood thinner Plavix faces generic competition next year, topped analysts’ third-quarter profit estimates on higher drug sales.

Net income rose 2.1 percent to $969 million, or 56 cents a share, from a year earlier, the New York-based company said in a statement. Profit excluding certain items was 61 cents a share, beating by 2 cents the average estimate of 15 analysts surveyed by Bloomberg. Bristol-Myers also raised the bottom of its 2011 profit forecast by 5 cents a share.

Chief Executive Officer Lamberto Andreotti said the drugmaker will stay focused on making acquisitions and licensing deals to grow its pipeline and replace Plavix’s estimated $7 billion in annual sales this year.

“It was a very solid showing,” said Mark Schoenebaum, an analyst with International Strategy & Investment Group Inc. in New York. Investors are focusing more on drugs in testing than earnings, he said in a phone interview. “This is not a stock where most people are trading the quarter, people are looking beyond that.”

Revenue Increase

Revenue increased 11 percent to $5.35 billion, beating the $5.33 billion average estimate of 12 analysts surveyed by Bloomberg. When foreign exchange rates were excluded from the revenue numbers, sales growth was 8 percent, the company said.

Bristol-Myers shares gained 1.5 percent to $32.99 at the close in New York.

“Business development remains one of our top priorities,” Andreotti said in a conference call today. “We’re interested in opportunities that include the long-term growth of the company,” he said, adding that the company “will stick to our discipline.”

The companies Bristol-Myers has acquired are mostly focused on biotechnology drugs that are typically injected, as opposed to small-molecule medicines, or pills, like Plavix. It also increased spending on research and development by 18 percent to $973 million for the quarter. Advertising and promotion costs decreased 11 percent to $205 million.

‘Year of Investment’

Next year will be one where the company focuses on increasing the business, specifically new products such as the skin cancer drug Yervoy and the blood thinner Eliquis, Andreotti said. Bristol-Myers’ loses revenue from Plavix in May and Avapro, a diabetes drug, in March.

“It will be a year of investment,” Andreotti said.

Erik Gordon, a professor at the University of Michigan who tracks the industry, said that Andreotti’s comments signal more deals to come.

“This is the strongest indication they’ve given in a long time that they are going to do acquisitions -- probably not a mega-acquisition, but probably something bigger than a bread box,” Gordon said in an e-mail. Gordon said that Abbott Laboratories’ soon-to-be-spun-off brand-name drug unit would be a good fit for the company.

Bristol plans to launch Eliquis and boost Yervoy sales in 2012, Andreotti said. Yervoy is projected to have 2012 sales of $783 million, according to an average of three analysts, and Eliquis $161 million.

Plavix Sales

Plavix sales increased 8 percent to $1.79 billion from a year earlier. Plavix is scheduled to face generic competition in May 2012. Revenue from Abilify -- the company’s second-biggest drug, used to treat schizophrenia and other mood disorders -- grew 14 percent to $691 million.

Yervoy, approved by U.S. regulators in March and part of Bristol-Myers’s 2009 acquisition of Medarex Inc., generated $121 million. Sales of Orencia, used to treat rheumatoid arthritis, rose 27 percent to $233 million from a year earlier.

Revenue from Onglyza, Bristol-Myers’s drug used to treat Type 2 diabetes, more than doubled to $127 million.

Bristol-Myers raised its 2011 forecast in July. Today, it increased the lower end 5 cents to $2.25 to $2.30 a share. The company’s projection doesn’t include the effects of the Food and Drug Administration’s three-month delay of an approval decision for dapagliflozin, a diabetes drug being developed with London- based AstraZeneca Plc.

The FDA postponed its decision on the drug while asking the companies to submit data from current and recently completed late-stage clinical trials, Bristol-Myers and AstraZeneca said yesterday in a statement.

--With assistance from Tom Randall in New York and Molly Peterson in Washington. Editors: Angela Zimm, Bruce Rule

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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