Bristol-Myers Squibb yesterday said that 2007 will see an about-turn in its fortunes, with a return to sales and earnings growth. The news left investors heartened after what was, essentially, yet another disappointing quarter, with sales putting in a marginal 1% improvement to $4.9 billion. The market was also cheered that B-MS beat expectations, with quarterly profit from continuing operations jumping 89% to $991 million compared to the same period last year and revenues slightly above forecasts, although much of the increase resulted from tax benefits.
With the patent expiry of Pravachol (pravastatin) – B-MS’ biggest drug with $2 billion in annual sales – looming ever closer on the horizon, the US giant took the opportunity to outline its plans for the future. Said Peter Dolan, chief executive of B-MS: “We’re building a product portfolio and flexible cost structure that are expected to deliver a period of sustained sales and earnings growth beginning in 2007, when major exclusivity losses should be behind us.”
In light of the conclusion of the wholesaler stocking scandal, the strength of B-MS’ management in propelling a re-birth will now come under the spotlight. Last month, the company struck a deal with federal government to end a criminal investigation into charges that it used dubious means to artificially inflate its sales and profits. The company agreed to pay $300 million in penalties and undertake a series of corporate reforms to settle the matter [[16/06/05a]].