Bristol-Myers Squibb Company
) recently announced that the US Food and Drug Administration (FDA)
has cleared a label update for its hepatitis B virus (HBV) therapy,
Baraclude. The FDA has allowed Bristol-Myers to update Baraclude's
label so that data on African Americans and liver transplant
recipients suffering from HBV may be included.
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The FDA approved the label update on the basis of data from two
studies. One study (ETV-085: n=46) evaluated Baraclude in
African-American patients suffering from chronic HBV. Another study
(ETV-109: n=65) evaluated Baraclude in patients, who had to undergo
liver transplant due to HBV related complications.
Baraclude is currently approved for the treatment of chronic HBV in
adults with evidence of active viral replication and persistent
increase in serum aminotransferases or histologically active
disease. The safety and efficacy of Baraclude for treating
pediatrics (less than 16 years of age) suffering from HBV has not
yet been established.
Even though impressed by the label update of Baraclude, since HBV
is an area of concern for the African-American population, we
believe that investor focus will remain on how Bristol-Myers fares
following the US loss of exclusivity of its blood thinner Plavix on
May 17, 2012. Moreover, hypertension treatment Avapro/Avalide went
off patent 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 partner
) revamped their long-standing alliance regarding the drugs. The
new agreement will be effective from January 1, 2013.
The loss of exclusivity of these drugs in the US hurt
Bristol-Myers' second quarter 2012 results with net sales declining
18% to $4.44 billion. US sales of Plavix plummeted 60% to $701
million in the second quarter of 2012 (global sales were also down
60% to $741 million). US sales of Avapro/Avalide were down 85% to
$20 million during the second quarter of 2012.
We expect Bristol-Myers' results in the third quarter of 2012
(scheduled to be announced on October 24) to be impacted adversely
by the genericization of Plavix in the US.
Bristol-Myers is looking to combat the generic threat through
partnering deals and acquisitions and is introducing new products
to augment its product portfolio. The Amylin buy in August 2012,
through which Bristol-Myers expanded its presence in the lucrative
diabetes market, is an effort to combat the substantial revenue
losses due to Plavix's genericization in the US.
Neutral on Bristol-Myers
Currently, we have a long-term Neutral recommendation on
Bristol-Myers. The stock carries a Zacks #3 Rank (Hold rating) in
the short run.