Bristol-Myers 1Q sales jump but costs keep its profit flat

TRENTON, N.J. – Bristol-Myers Squibb Co. trounced Wall Street’s first-quarter profit expectations as soaring sales of key new medicines offset higher expenses and a big hit from generic competition. Those factors left the drugmaker with a nearly flat profit despite revenue jumping 9 per cent, a sales trend that bodes well for the future, and Bristol-Myers hiked its profit forecast significantly.

The company’s hot new cancer drugs, Opdivo and Yervoy, posted combined sales more than 160 per cent higher than a year ago. Sales more than doubled for Eliquis for preventing heart attacks and strokes, which is marketed jointly with partner Pfizer Inc. And sales of Bristol-Myers’ hepatitis C drug Daklinza also are rising quickly, giving the company strong positions in three of the hottest drug categories today.

The New York-based company said Thursday that its net income amounted to $1.2 billion, up 0.8 per cent from $1.19 billion in 2015’s first-quarter. Earnings per share in the latest quarter amounted to 71 cents, or 74 cents excluding one-time items. That was 9 cents above what analysts surveyed by FactSet were expecting.

Surging revenue was offset by a higher tax bill, slightly higher research spending and increased manufacturing costs due to the growing product sales.

Revenue totalled $4.39 billion, up from $4.04 billion in the year-ago quarter and above the $4.27 billion analysts were expecting. Excluding the impact of unfavourable currency exchange rates, revenue rose by 11 per cent.

The sales increase was driven by the company’s growing cancer medicine franchise, heart drug Eliquis, Orencia for rheumatoid arthritis and hepatitis C drug Daklinza. On the flip side, recent generic competition for schizophrenia drug Abilify slashed its revenue by 94 per cent to just $33 million, generic copycats hurt sales of older antiviral medicines and Bristol-Myers no longer gets revenue from older cancer drug Erbitux after transferring away its rights.

Opdivo and Yervoy are leading the feverish race to dominate in the nascent and extremely lucrative field of immuno-oncology — medicines that fight cancer by stimulating the immune system to better recognize and attack tumour cells. These drugs have been significantly increasing survival times in many patients with some of the deadliest cancers.

Opdivo posted $704 million in first-quarter sales and Yervoy added $263 million. Opdivo is approved to treat melanoma and lung and kidney cancers, awaits approval for treating Hodgkin lymphoma and is being tested, alone and together with Yervoy, against other cancer types. Cal. Meanwhile, another type of cancer drug that the company is developing with partner AbbVie Inc., called Empliciti, posted $28 million in U.S. sales and is likely to be approved soon in Europe.

“We had a very good first quarter, highlighted by strong sales growth and significant progress in bringing the promise of immuno-oncology across multiple types of cancer to patients,” Dr. Giovanni Caforio, the company’s chief executive, said in the statement.

Bristol-Myers raised its 2016 earnings-per-share forecast from a range of $2.30 to $2.40, to a range of $2.50 to $2.60, excluding one-time items.


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