2Q EARNINGS: Bristol-Myers lowers profit forecast as sales sink
This article was originally published in Scrip
Bristol-Myers Squibb lowered its profit forecast for the year, citing declining sales as the company continues to struggle to replace lost revenue following patent expirations. As expected, the company reported quarterly profit dropped.
Second-quarter net income fell 17% to $536 million, or 32 cents a share, on $4 billion in sales. Sales declined 9%. Non-GAAP operating profit of 44 cents a share is in line with Wall Street expectations.
Among the most disappointing aspects of the quarter, Bristol-Myers said its new blood-thinning drug Eliquis (apixaban) turned in a paltry $12 million in sales in the quarter, which wasn’t even a quarter of what some analysts expected and less than the company’s own estimates. Eliquis, sold with Pfizer, is in a tough race with new drugs from Johnson & Johnson and Boehringer Ingelheim. While it’s a small drug now, it represents a big market opportunity in the coming years.
Despite the relatively low sales (Eliquis posted $34 million for the first six months of the year), Bristol-Myers CEO Lamberto Andreotti predicted the drug would eventually make its way to the front of the pack of new blood-thinning therapies.
It was clearly a quarter that company executives and investors want to put behind them. The company expects its non-GAAP operating profit to be no more than $1.78 a share in 2013, which is a dime lower than a previous top estimate from the drug maker. Full-year sales will be between $16 billion and $16.5 billion.
“Most shareholders presumably hold Bristol-Myers not for 2013 numbers but for the longer term upside” of drugs in development, ISI Group analyst Mark Schoenebaum said.
That developmental pipeline includes a promising new cancer drug, nivolumab, which is being tested for melanoma, lung and kidney cancers. The drug also is being tested in combination with the company’s drug Yervoy (ipilimumab), which is approved for melanoma. No additional study data is expected to be made public this year for the nivolumab program.
Key patent losses last year continue to affect sales. Plavix (clopidogrel) sales declined 94% in the quarter to $44 million, while Avapro (irbesartan) revenue dropped 52% to $56 million.
The company’s biggest-selling drug, Abilify (aripiprazole), fell 21% to $563 million. The newly acquired diabetes drugs Byetta and Bydureon added more than $200 million in sales, which was less than some analysts expected.
Among the few bright spots in the quarter, Yervoy rose 44% to $233 million. Diabetes therapy Onglyza (saxagliptin) rose 40% to $240 million. Blood cancer drug Sprycel (dasatinib) climbed 28% to $312 million. Rheumatoid arthritis treatment Orencia (abatacept) jumped 21% to $352 million.