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Bristol-Myers Squibb's Profit Dips 2 Percent on Flat Sales

Tuesday, 26 Oct 2010 08:54 AM

Bristol-Myers Squibb Co. posted a slight decline in third-quarter profit Tuesday as its restrained spending was offset by flat sales of its drugs, lower income from its partners and bigger discounts to government due to the health care overhaul.

Bristol-Myers, which sells blood thinner Plavix, the world's second best-selling drug, reported third-quarter net income of $949 million, or 55 cents per share. That's down nearly 2 percent from $966 million, or 48 cents per share, in the year-ago quarter.

Excluding several minor one-time items, the New York-based company said income would have been $1 billion, or 59 cents a share.

That beat the 53-cent expectation of analysts handily.

However, Bristol's $4.8 billion in sales was slightly below the consensus of analysts. They were expecting $4.92 billion.

Still, the company confirmed its 2010 profit forecast, given in July, for $1.84 to $1.94 a share, or $2.10 to $2.20 a share, excluding one-time items.

Bristol-Myers said bigger discounts required for medicines the government buys for Medicaid patients, part of the U.S. health-care overhaul, reduced net sales in the quarter by 1.6 percent, or 2 cents per share.

The revenue decline also was due to lower sales of Bristol's No. 2 drug, Abilify for schizophrenia and bipolar disorder, as well as for cancer drug Erbitux and Avapro for high blood pressure.

In addition, unfavorable currency exchange rates reduced revenue from overseas sales by 3 percent, and Bristol's share of income from foreign sales of Plavix, which it shares with partner Sanofi-Aventis SA, fell by half due to increasing generic competition in Europe.

Otherwise, it was a relatively strong quarter for Bristol, which won U.S. approval of hepatitis B treatment Baraclude for liver failure caused by scarring and approval in Japan of its biologic drug for rheumatoid arthritis, Orencia.

Bristol has two other drugs with deadlines at the end of this week for U.S. regulators to rule on new uses: Sprycel for patients newly with diagnosed chronic myeloid leukemia and diabetes drug Onglyza in combination with metformin, a cheap, widely used starter drug for diabetes patients, respectively. The Onglyza-metformin combo also awaits approval in the European Union.

Sales of Onglyza, launched in summer 2009, have been disappointing so far, hitting only $47 million in the third quarter. But Plavix sales were strong, at $1.66 billion, and sales of Baraclude and HIV drugs Reyataz and Sustiva all were up.

Two weeks ago, Bristol wrapped up its $735 million purchase of Zymogenetics Inc., a biotech company that sells Recothrom for reducing bleeding during surgeries. Together with Bristol, it's developing a promising hepatitis C treatment in midstage testing.

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Bristol-Myers Squibb Co. posted a slight decline in third-quarter profit Tuesday as its restrained spending was offset by flat sales of its drugs, lower income from its partners and bigger discounts to government due to the health care overhaul. Bristol-Myers, which sells...
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2010-54-26
Tuesday, 26 Oct 2010 08:54 AM
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