Bristol-Myers Squibb Company
) fourth quarter 2012 earnings (excluding special items) of 47
cents per share were ahead of the Zacks Consensus Estimate by 4
cents. Adjusted earnings in the final quarter of 2012 were
however 11% below the year-ago earnings.
The year-over-year decline in earnings was due to reduced
sales of hypertension treatment Avapro/Avalide and blood-thinner
Plavix, which went off-patent in the US in Mar 2012 and May 2012,
Net sales in the reported quarter decreased 23% to $4.2
billion. The year-over-year decline in revenue was attributable
to lower sales of Avapro/Avalide and Plavix. Revenues in the
reported quarter were just shy of the Zacks Consensus Estimate of
$4.1 billion. US net sales in the quarter declined 38% to $2.2
billion. Sales in international markets increased 6% 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), plummeted 97% to $49 million in the quarter. Plavix
has been co-developed by Bristol-Myers and
). US sales of the drug were down 99% to $20 million. The
genericization of the drug in the US was responsible for the
Sales of Baraclude, one of the top prescribed therapies for
hepatitis B virus, came in at $360 million, up 13% year over
year. Leukemia drug, Sprycel, registered sales of $281 million,
up 24%. Sales of rheumatoid arthritis (RA) drug, Orencia, stood
at $325 million, up 26%, while worldwide sales of HIV treatment
Sustiva declined 7% to $383 million in the final quarter of 2012.
Global sales of another HIV therapy, Reyataz, decreased 5% to
Furthermore, Onglyza/Kombiglyze, a type II diabetes treatment,
contributed approximately $198 million to sales in the quarter,
up 29% year over year.
Global sales of Abilify, approved for the treatment of
schizophrenia and depression, increased 11% to $819 million. The
drug performed well both in the US and international markets.
Sales of cancer drug Erbitux were however down 6% to $171 million
in the fourth quarter of 2012.
Skin-cancer drug Yervoy, approved in the US and EU in 2011,
contributed $211 million to total revenues during the final
quarter of 2012, up 47% from the year-ago period.
Hypertension treatment Avapro/Avalide recorded a 57% decline
in sales, which came in at $84 million in the reported quarter.
The drug lost patent protection in the US in March 2012.
Following the genericization of blood thinner Plavix and
hypertension therapy Avapro/Avalide in major markets across the
globe, Bristol-Myers and Sanofi revamped their long-standing
alliance regarding the drugs. The new agreement is effective from
Jan 1, 2013.
Adjusted gross margin as a percentage of net sales stood at
76.4% in the reported quarter as against 75.2% in the comparable
quarter of 2011. Adjusted marketing, selling and administrative
expenses in the reported quarter declined 5.4% to $1.2
Advertising and product promotion for the quarter declined 26%
to $212 million in the final quarter of 2012. Adjusted research
and development expenses for the quarter increased 0.9% to $1
billion as Bristol-Myers continues to invest in its pipeline.
For the full year 2012, Bristol-Myers recorded earnings of
$1.99 (excluding special items) per share, beating the Zacks
Consensus Estimate of $1.96 per share. However, 2012 earnings
were 13% below 2011 earnings. 2012 earnings per share were on the
higher end of the guidance range of $1.90-$2.00 provided by the
company during the third quarter 2012 earnings release.
Net revenues for the full year 2012 came in at $17.6 billion,
in line with the Zacks Consensus Estimate. Full year revenues
were 17% lower than last year's revenues.
Projection for 2013
Apart from announcing financial results, Bristol-Myers also
provided guidance for 2013. The pharma major expects adjusted
2013 earnings in the range of $1.78-$1.88 per share. The Zacks
Consensus Estimate for 2013 is $1.84 per share, well within the
guidance range provided by the company.
Bristol-Myers expects 2013 worldwide net sales in the range of
$16.2-$17.0 billion. The Zacks Consensus Estimate for 2013 is
$16.7 billion, well within the company's forecast.
Bristol-Myers expects 2013 gross margin between 72% and 73%.
Bristol-Myers' advertising and promotion expenses for 2013 are
expected to increase in the high single digit range whereas 2013
research and development expenses are expected to rise in the
low-single-digit range. The company's marketing, sales and
administrative expenses are expected to remain flat year over
Even though the genericization of Plavix and Avapro has
resulted in significant loss of revenues for Bristol-Myers, we
believe that the company's diversified business model combined
with its strong financial position will help in countering the
headwinds. The company got a boost with the US approval of its
anti-clotting drug Eliquis (apixaban) earlier this month.
Moreover, in Nov 2012, type II drug, Forxiga, was approved in the
Moreover, Bristol-Myers entered in to a couple of
collaborative agreements in the fourth quarter of 2012. We
believe that Bristol-Myers will continue pursuing deals and
acquisitions throughout 2013 to strengthen its portfolio thereby
minimizing the impact of genericization.
Bristol-Myers carries a Zacks Rank #3 (Hold). However, other
large cap pharma stocks such as
Eli Lilly and Company
) look more attractive and carry a Zacks Rank #2 (Buy).
BAYER A G -ADR (BAYRY): Free Stock Analysis
BRISTOL-MYERS (BMY): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
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