Bristol-Myers Squibb Company
) third quarter 2013 earnings (excluding special items) of 46
cents per share beat the Zacks Consensus Estimate by 2 cents.
Adjusted earnings in the third quarter of 2013 were 12% above the
year-ago figure driven by higher revenues.
Net sales in the reported quarter increased 9% to $4.1 billion,
driven by strong sales of drugs targeting the oncology and
diabetes markets. Revenues edged past the Zacks Consensus
Estimate of $4 billion. U.S. net sales in the quarter climbed 1%
to $2 billion. Sales in international markets increased 18% to $2
Quarter in Detail
Global net sales of Plavix, an anti-platelet blood thinner,
indicated to reduce the risk of heart attack in patients with
atherosclerosis (the build-up of plaque and hardening of the
arteries), declined 34% to $42 million in the quarter. U.S. sales
of the drug were down 58% to $18 million.
The genericization of the drug in the U.S. was responsible for
the massive decline. Hypertension treatment Avapro/Avalide
recorded a 25% decline in sales to $71 million in the reported
Avapro/Avalide and Plavix went off-patent in the U.S. in Mar 2012
and May 2012, respectively. Following the genericization of
Plavix and Avapro/Avalide in major markets across the globe,
Bristol-Myers and partner
) revamped their long-standing alliance regarding the drugs. The
new agreement has taken effect from Jan 1, 2013. Newly launched
anti-clotting drug, Eliquis, co-developed with
), posted sales of $41 million in the third quarter of 2013, as
against $12 million recorded in the preceding quarter.
Sales of Baraclude, one of the top prescribed therapies for
hepatitis B virus, came in at $378 million, up 9% year over year.
Worldwide sales of HIV treatment Sustiva came in at $389 million
in the third quarter of 2013, up 5%. Global sales of another HIV
therapy, Reyataz, climbed 3% to $375 million.
The key cancer drugs at Bristol-Myers performed very well in the
third quarter of 2013. Leukemia drug, Sprycel, registered sales
of $316 million, up 20%. Skin-cancer drug Yervoy, approved in the
U.S. and EU in 2011, contributed $238 million to total revenue
during the third quarter of 2013, up 33% from the year-ago
period. Sales of another oncology drug at Bristol-Myers, Erbitux,
also improved during the third quarter of 2013. Sales climbed 6%
to $183 million in the reported quarter.
Diabetes drugs like Bydureon (up 335% to $87 million), Byetta (up
93% to $106 million) and Onglyza/Kombiglyze (up 19% to $211
million) performed impressively during the third quarter of 2013.
Moreover, sales of diabetes drug Forxiga (dapagliflozin),
approved in the EU and some other ex-U.S. markets, came in at $7
million during the quarter. The U.S. Food and Drug Administration
will decide on the drug by Jan 11, 2014. U.S. approval will boost
its sales potential.
Global sales of Abilify, approved for the treatment of
schizophrenia and depression, decreased 16% to $569 million. The
drug performed disappointingly in the U.S. with sales declining
25% . Sales of rheumatoid arthritis drug, Orencia, stood at $375
million, up 22%.
Adjusted gross margin as a percentage of net sales stood at 72.8%
in the reported quarter as against 75% in the comparable quarter
of 2012. Adjusted marketing, selling and administrative expenses
in the reported quarter were 2.5% below the year-ago figure of $1
billion. Adjusted research and development expenses for the
quarter fell marginally to $893 million.
2013 Earnings Guidance Maintained
Bristol-Myers continues to expect adjusted earnings for 2013 in
the range of $1.70-$1.78 per share. The Zacks Consensus Estimate
for 2013 currently hints at earnings of $1.72 per share.
We are impressed by the strong sales of the newly launched drugs
at Bristol-Myers during the third quarter of 2013. The earnings
beat in the quarter was primarily due to the strong sales of the
new drugs, especially in the cancer and diabetes fields.
Bristol-Myers has been trying to offset the declining sales of
some of its important products by bringing in new products
through in-licensing deals. We are also impressed by the
company's efforts to develop its pipeline.
Bristol-Myers, a biopharmaceutical company, carries a Zacks
Rank #4 (Sell).
) appears to be more attractive in the biopharma space with a
Zacks Rank #1 (Strong Buy).
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