* Profit, excluding items, 47 cts/shr vs Street view 43 cts
* Sales $4.19 bln vs Street view $4.12 bln
* 2013 forecast is cut, but is in line with Street view
* Shares rise 2.5 pct
By Ransdell Pierson
Jan 24 Bristol-Myers Squibb Co reported
better-than-expected quarterly results on Thursday, lifting its
shares 2.5 percent, but scaled back its 2013 earnings forecast
following setbacks for several of its experimental drugs.
The company said it expects earnings this year of $1.78 to
$1.88 per share before special items. That would represent a
decline of as much as 11 percent from 2012, mainly because of
generic competition for its Plavix blood clot preventer and
Avapro blood pressure treatment.
Although the 2013 forecast is in line with the average Wall
Street estimate of $1.83 per share - thanks in part to a highly
favorable tax rate this year - the company conceded it would not
reach its more ambitious earlier goals.
In March 2010, riding high from approvals of new medicines
and confidence in other ones in development, Bristol-Myers said
2013 earnings would be "at minimum $1.95" per share, adding it
was "well positioned to deliver on the promise of our pipeline."
"Bristol today finally owned up to what most analysts were
already aware, that they are unlikely to hit the minimum
guidance they set a couple of years ago," said Atlantic Equities
analyst Richard Purkiss. "Various things have made that
In January 2012, U.S. regulators rejected dapaglifozin, a
new type of treatment for type 2 diabetes, citing safety
concerns. Just months later, the company's experimental brivanib
oncology drug failed in a late-stage trial to prolong survival
in liver cancer patients.
The most spectacular setback came last August, when
Bristol-Myers scrapped BMS-986094, a high-profile treatment for
hepatitis C, after a patient died of heart failure in a
mid-stage trial and others were hospitalized. The company took a
charge of $1.8 billion in the 2012 third quarter for the failed
medicine. Although the drug would not have reached the market
for several years, the failure tarnished the company's research
Bristol-Myers has agreed to pay $80 million to patients hurt
in the hepatitis C study, The Wall Street Journal reported on
Thursday. The drugmaker confirmed it had an "agreement in
principle" to settle the matter but said terms of the pact were
Despite its research setbacks, Bristol-Myers shares are
trading at 19 times expected 2013 earnings per share, well above
the average multiple of 12.5 for other large drugmakers.
Purkiss said the premium is partly warranted because of huge
sales potential of Eliquis, a new type of blood clot preventer
developed with Pfizer Inc that was approved by U.S.
regulators last month. He said several Bristol-Myers cancer
drugs in late-stage trials also have blockbuster sales
"Hopes for those drugs, and Eliquis, could justify a
premium, but probably not the current premium," Purkiss said,
adding that Bristol-Myers shares could be vulnerable to new
The company's new 2013 profit outlook assumes a company tax
rate this year of 16 percent, far below a rate of up to 23
percent that some analysts had expected. Bristol-Myers officials
said the rate is coming down due to a new federal tax credit for
research and development and other factors.
The drugmaker said it earned $925 million, or 56 cents per
share, in the fourth quarter, up from $852 million, or 50 cents
per share, a year earlier.
Excluding special items, such as a $411 million tax benefit
from the write-off of the failed hepatitis C drug, the company
earned 47 cents per share. On that basis, analysts' average
forecast was 43 cents per share.
Revenue plunged 23 percent to $4.19 billion following U.S.
patent expirations last year on Plavix and Avapro. Wall Street
had expected $4.12 billion.
Plavix sales plunged 97 percent to $49 million, while Avapro
sales fell 57 percent to $84 million. Soaring growth of newer
drugs helped cushion those declines.
Sales of arthritis treatment Orencia jumped 26 percent to
$325 million, and combined revenue from diabetes drugs Onglyza
and Kombiglyze rose 29 percent to $198 million. Leukemia
treatment Sprycel rose 24 percent to $281 million. Yervoy, a new
treatment for melanoma, grew 47 percent to $211 million.