Bristol-Myers Squibb reported that sales of its top-selling and most profitable drug Plavix, a blood thinner, fell 53% in the fourth quarter to less than half a billion dollars. The damage was even worse in the U.S., where Plavix sales plummeted 62%. That's because the privately-held Canadian drug company Apotex dumped what Bristol estimates was a 6-month supply of generic Plavix on the market, in just three weeks last August.
A court subsequently ordered Apotex to stop making the drug, and the companies are fighting over the patent in a federal court trial that started earlier this week. In the earnings press release Bristol-Myers said, "the full impact of [generic Plavix]...cannot be estimated with certainty at this time..." Later, on the conference call, interim CEO Jim Cornelius said 2007 would be a "transitional year." Officials said "underlying demand" for the Plavix molecule -- in other words, for generic and branded Plavix -- "remains strong," and that prescriptions are up 14%. The company views that as a bullish sign for future sales if or when it wins the court case. Some of that increase could be attributed to the recent recommendation of an FDA Advisory Committee, which said that patients who have received drug-coated stents should stay on Plavix longer to help prevent the risk of a blood clot forming. The company also remains confident it will win the patent battle. On the call, Cornelius said, "We continue to believe the patent is valid and is being infringed," and the CFO said, "We expect to return to sales and earnings growth within the year."
During the Q-and-A period on the call, Cornelius said the CEO search committee chairman is "moving with deliberate speed, but [is] making progress" toward hiring a permanent CEO. Some analysts think Bristol's having a hard time attracting someone, because the Plavix patent issue is not settled, the company is under investigation over the deal it tried to strike with Apotex and it's considered a potential takeout target.
Bristol's partner on the cancer drug Erbitux, ImClone Systems, is also looking for a new CEO. The candidate would have to be willing to work under billionaire investor and ImClone Chairman Carl Icahn. On its conference call, ImClone said it has "met with a large number of experienced candidates" and that the search will conclude as soon as possible. The company reported fourth quarter sales of Erbitux that were $13 million below the analyst consensus. Sales for the colorectal and head-and-neck cancer drug fell 4% from the previous quarter, in the face of new competition from Amgen's Vectibix. Amgen reports earnings after the closing bell today. ImClone officials said they're in "discussions" with Bristol about "maximizing the potential" of Erbitux. Carl Icahn has made it clear that Bristol, in his opinion, was not doing enough to promote the drug.
This afternoon ICOS shareholders vote on the Eli Lilly buyout offer -- stay tuned for the result of that one. Some still think there's a chance the majority of investors could reject the deal. The meeting is set to start at 2 p.m. ET. We'll have the results ASAP on CNBC and here on CNBC.com.
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