Bristol-Myers sees 64% leap in 3rd quarter 2009 ongoing earnings

Slightly beating analysts' consensus estimates, and helped by cost controls, US drug major Bristol-Myers Squibb posted a 64% increase in third-quarter 2009 earnings based on continuing operations, and raised the low end of its full-year earnings forecast.

Net income attributable to the company was $966 million, or 48 cents per share, a 63% drop compared with $2.58 billion, or $1.28 per share, a year earlier, when the company recorded a huge gain from the sale of its Convatec wound-healing unit.

Revenue rose 4% to $5.49 billion, slightly below the $5.52 billion expected by analysts. Excluding foreign exchange impact, the increase would have been 7%, B-MS noted.

'The performance in the third quarter of 2009 clearly shows the results of our outstanding business performance, disciplined financial management and overall strategic execution,' said James Cornelius, chairman and chief executive. 'We are transforming Bristol-Myers Squibb into a BioPharma leader and the recent approval and launch of Onglyza [saxagliptin, co-marketed with Anglo-Swedish drug major AstraZeneca] for the treatment of type 2 diabetes is a great example of what we do best: discover, develop and deliver innovative medicines that help patients prevail over serious diseases,' he added.

The company raised its 2009 full-year forecast for profit from continuing operations to $1.72 to $1.77 from $1.58 to $1.68. The increase includes the $310 million it will get in the fourth quarter from the sale of its over-the-counter assets in Asia and shares in PT Bristol-Myers Squibb Indonesia Tbk. It also increased by 5 cents the lower end of its outlook, when certain items are excluded, to $2.00 a share to $2.05 a share.

Biopharma sales up 6%

BioPharmaceuticals net sales totaled $4.8 billion in the third quarter, representing an increase of 6%, or 9% excluding foreign exchange impact, compared to the same period in 2008, helped by blood thinner Plavix (clopidogrel), up 8% to $1.55 billion, and Abilify (aripiprazole) which advanced 16% to $653 million. US sector turnover rose 12% to $3.0 billion, while international net sales decreased 2%, or increased 5% excluding foreign exchange impact, to $1.8 billion, the drugmaker noted.

Within the firm's virology franchise, sales of HIV agents Sustiva (efavirenz) increased 7% to $315 million and Reyataz (atazanavir) revenue was up 5% to $360 million. Turnover of Baraclude (entecavir), for hepatitis B, leapt 33% year-on-year to $191 million.

Among B-MS' newer products, leukemia agent Sprycel (dasatanib) rose 30% to $107 million, while Orencia (abatacept) for rheumatoid arthritis increased 36% to $162 million. Onglyza (saxagliptin), a dipeptidyl peptidase-4 inhibitor for the treatment of type 2 diabetes which was recently approved in the USA, contributed $20 million. Sales of cancer d rug Erbitux (cetuximab) were disappointing, falling 3% to $179 million.

BioPharmaceuticals realized a 170 basis point increase in gross margin compared to the third quarter of 2008. Key drivers of the improvement were higher biopharmaceutical average price, cost savings, including those related to continuous improvement initiatives, foreign exchange favorability and product mix. Pretax earnings for the sector increased 19% to $1.2 billion, driven by increased sales and improved gross margins, as well as reductions in marketing, selling and administrative expenses from the company's continuous improvement initiatives, said B-MS.