Bloomberg News

Bristol-Myers Profit Tops Estimates on Renewed Sales Growth (2)

October 23, 2013

Bristol-Myers Squibb Co. (BMY:US) beat analysts’ third-quarter earnings and sales estimates as demand for the company’s cancer and arthritis drugs grew.

Earnings excluding certain items of 46 cents a share beat the 44-cent average of 16 analysts’ estimates (BMY:US) compiled by Bloomberg. Sales increased 9 percent to $4.07 billion, the New York-based drugmaker said in a statement. That result topped by 1.6 percent the average analyst projection of $4 billion.

Bristol-Myers’s sales are returning to growth after patent expirations shrank revenue in the past five quarters, led by the loss of marketing exclusivity for the anti-stroke pill Plavix. Now new products, including the company’s cancer and hepatitis C franchises, are emerging and may boost sales further.

“It’s their tough year this year, but it’s all about the pipeline,” Judson Clark, an analyst with Edward Jones & Co., said in a telephone interview.

The company’s biggest pipeline prospect is nivolumab, which uses the body’s own immune system to fight tumors and is in late-stage trials for lung cancer. If approved, nivolumab could generate sales of $10.9 billion by 2023, Alex Arfaei, an analyst with BMO Capital Markets Corp., said in a note to clients.

Bristol-Myers has been putting resources behind the development of nivolumab and other new cancer drugs. The medicines take the brakes off the immune system or unmask tumors from the body’s disease-fighting mechanisms, allowing tumors to fall under attack.

Net Income

Yervoy, another immune system-based drug already on the market, generated $238 million, an increase of 33 percent from a year ago. Sales of Sprycel, a leukemia treatment, rose 20 percent to $316 million. Orencia, a rheumatoid arthritis treatment that was approved in a new formulation in 2011, saw sales grow 22 percent to $375 million.

Net income was $692 million, or 42 cents a share, compared with a loss of $711 million, or 43 cents, last year when the company took a $1.83 billion charge for a failed hepatitis C drug. Bristol-Myers reaffirmed its adjusted earnings forecast (BMY:US) for the year of $1.70 to $1.78 a share.

Bristol-Myers fell 1.6 percent to $48.96 at 4 p.m. in New York trading. Investors have rewarded Bristol-Myers, whose stock has gained 47 percent (BMY:US) in the last 12 months, compared with a 22 percent gain in the Standard & Poor’s 500 Pharmaceuticals Index. The company has the highest price-to-earnings ratio of any major U.S. drugmaker over the last 12 months.

Denial Stage

Sales of Eliquis, the blood thinner approved last year and sold with Pfizer Inc. (PFE:US) were $41 million. Bristol-Myers has said that Eliquis sales will improve as the company gets more access to reimbursement. Clark, the Edward Jones analyst, disagrees that the drug will take off suddenly after a disappointing start.

“We’re now in the denial stage of grief on Eliquis,” Clark said. “I struggle to remember slow ramps that all of a sudden take off. Estimates keep coming down and pushing out and they still keep coming in a little light. We’re getting to the point where Eliquis may be a solid drug, it may not be the resounding success everyone thought.”

Onglyza, a diabetes drug that competes with Merck & Co.’s Januvia, had $211 million in sales, up 19 percent from a year before. Bydureon, an injectable diabetes drug, generated $87 million.

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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Companies Mentioned

  • BMY
    (Bristol-Myers Squibb Co)
    • $58.45 USD
    • 4.29
    • 7.34%
  • PFE
    (Pfizer Inc)
    • $29.72 USD
    • 0.23
    • 0.76%
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