Bristol-Myers Posts Lower Profit, Revenue -- Update

By Dow Jones Business News, 
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By Joshua Jamerson

Bristol-Myers Squibb Co. reported declines in second-quarter earnings and revenue as the drug maker continues to restructure its operations.

Results, though, surpassed analyst expectations, helped by strong sales of the company's cancer drugs. Bristol shares slipped 25 cents to $49.07 in morning trading.

Bristol late last year unveiled plans to restructure its research and development operations, eliminating programs in certain disease areas. The company instead sought to focus on areas that lends itself to the discovery of new drugs that can make a big clinical difference, such as cancer drugs that harness the body's immune system.

World-wide sales of Yervoy, a skin-cancer treatment that was Bristol's first so-called immunotherapy to receive approval, rose 38% in the second quarter to $321 million. Meantime, revenue from leukemia drug Sprycel grew 18% to $368 million, while sales for head, neck and colon cancer therapy Erbitux were $186 million, up 9%.

Overall for the second quarter, Bristol reported a profit of $333 million, or 20 cents a share, down $536 million, or 32 cents a share, a year earlier. Excluding items, per-share earnings rose to 48 cents from 44 cents.

Revenue edged down 4% to $3.89 billion. However, excluding the impact from the recent divestiture of Diabetes Alliance, revenue rose 7%.

Analysts polled by Thomson Reuters expected per-share profit of 44 cents and revenue of $3.85 billion.

ISI Group analyst Mark Schoenebaum said that helping Bristol's bottomline this quarter was $171 million in other income, which are primarily royalties from Astrazeneca for sales of diabetes drugs Onglyza and Forxiga.

"Overall, I don't expect much of a stock reaction" to Bristol's results, Mr. Schoenebaum said. "The focus remains nivolumab development."

Cancer treatment nivolumab is another immunotherapy that the company is studying in various late-stage trials, including for lung cancer.

Bristol's gross margin widened to 74.5% from 72.6% as total expenses fell 2.2%.

U.S. revenue decreased 7% to $1.9 billion in the quarter, while international revenues decreased 1% to $2 billion.

The company also affirmed its earnings outlook for the year.

Write to Joshua Jamerson at Joshua.Jamerson@dowjones.com

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