Bristol-Myers Squibb Thursday said quarterly earnings rose 6 percent on resumed growth for its Plavix blood-clot preventer, and higher sales of newer drugs that offset waning demand for older products.
The drugmaker , whose shares fell more than 3 percent amid a moderate decline for the drug group, slightly boosted its 2007 profit forecast and expects 2008 profit will rise 17 percent to 18 percent.
The company said it earned $706 million, or 36 cents per share, in the second quarter, compared with $667 million, or 34 cents per share, in the year-earlier period.
Excluding special items, the New York-based drugmaker earned 37 cents per share. Analysts on average expected 36 cents per share, according to Reuters Estimates.
Morgan Stanley analyst Jami Rubin said a revival in sales of Plavix was "the swing factor" during the quarter, after plunging sales of Bristol's most important medicine contributed to earnings declines or losses in the three prior quarters.
"While the company reported a decent quarter today, we believe the impact of this will be somewhat muted given the impressive performance by some of its peers" during the second quarter, Rubin said in a research note.
Schering-Plough, Merck and Johnson & Johnson are among its rivals that earlier posted results well above Wall Street forecasts.
Plavix was hurt by a generic launched last August by Apotex. Although a New York federal judge weeks later blocked continued sale of the generic, huge supplies of it already on the market have undermined demand for Plavix for most of the past year.
But second-quarter sales of Plavix rose 4 percent to $1.19 billion, as almost all remaining supplies of the cheaper Apotex generic were exhausted.
"It's good to see that Plavix has rebounded and it appears the generic is out of the system," A.G. Edwards analyst Joseph Tooley said. "The company seems to be in pretty good shape."
Bristol-Myers said company revenue rose 1 percent to $4.93 billion, in line with Wall Street expectations, but would have fallen 1 percent if not for favorable foreign exchange factors.
Sales of blood pressure treatment Avapro rose 6 percent to $297 million, while sales of schizophrenia treatment Abilify jumped 27 percent to $412 million.
Revenue from Reyataz, a relatively new treatment for HIV, rose 8 percent to $254 million in the quarter.
However, sales of colon cancer drug Erbitux, marketed in partnership with ImClone Systems Inc., fell 6 percent to $162 million due to competition from newer products such as Genentech Inc's Avastin.
Cancer drug Taxol and cholesterol fighter Pravachol, once among Bristol's biggest products, saw sales fall 36 percent and 59 percent, respectively, due to generic competition.
The company forecast full-year, 2007 earnings, excluding special items, of $1.35 to $1.45 per share, from its earlier view of $1.30 to $1.40 per share. It said the earnings picture had improved because of cost controls and expected strong sales of several of its most important drugs.
The new forecast translates into growth of 24 percent to 33 percent over last year, when Plavix sales imploded.
U.S. District Judge Sidney Stein in June upheld the patent on Plavix, sold in partnership with French drugmaker Sanofi-Aventis, thereby preventing Apotex from bringing its generic back to market.
For 2008, Bristol forecast earnings of $1.60 to $1.70 per share, based on a number of assumptions, including mid- to high-single-digit percentage revenue growth and only mid-single digit growth in research costs. The average Reuters Estimates forecast for next year is $1.61 per share.
Shares of Bristol-Myers were down 94 cents at $30.65 in morning trading on the New York Stock Exchange, amid a 0.8 percent decline for the American Stock Exchange Pharmaceutical Index.