US healthcare giant Bristol-Myers Squibb saw its shares close down 2.4% at $21.14 on October 28, after a bout of heavy trading was sparked on news that the firm may dump its experimental diabetes drug Pargluva (muraglitazar) [[28/10/05d]] in addition to a disappointing set of results for the third quarter.
First, in what represents a substantial blow to the group, B-MS said that it is considering terminating its work on Pargluva, which is being developed with partner Merck & Co, after US regulators refused to approve the agent without additional clinical data on cardiac safety. Generating such data could take up to five years to complete, placing the future of the whole programme in doubt. Both companies, facing patent expiries on key products, have been counting on the diabetes drug to contribute to future sales growth, and earlier forecasts of the product's sales potential had been as high as $3 billion dollars.
This was followed by a mediocre set of results for the third quarter, which were accompanied by the company’s warning that profit for the full year may fall up to 18% as competition continues to erode its cholesterol-lowerer Pravachol’s (pravastatin sodium) market share, and as turnover of other drugs take a hit from mounting generic competition.
Consequently, the group lowered its full-year earnings target to the middle of its previously-reported $1.35-$1.45 per share forecast, falling under analysts’ general expectations and its own outlook for the upper end of that range. But Peter Dolan, B-MS’s chief executive, insisted there was no cause for concern, stating: “The company’s full-year expectations remain within our range and include our decision to make incremental, targeted investments, in addition to the spending programs we identified at mid year, to further support key products and pipeline priorities.”
B-MS posted third-quarter earnings of $964 million, or $0.49 per diluted share, under US Generally Accepted Accounting Principles, compared to $755 million, or $0.38 a share, for the comparable period of 2004. But results, which would have been dragged down by a fall in sales, were buoyed by a one-time gain of $569 million from the sale of the firm’s North America consumer medicines business.
Quarterly sales stayed level at $4.8 billion, as growth of newer pharmaceutical products and the nutrition segment were offset by the impact of continued exclusivity losses among older pharmaceutical products.
Worldwide pharmaceutical sales dipped 2% to $3.8 billion, driven by a 3% drop in revenues from the USA, primarily on generic competition for the anticancer agent Paraplatin (carboplatin) and the HIV therapy Videx (didanosine). Globally, poor performances were seen from: Pravachol which slipped 12% to $527 million; the cancer treatment Taxol (paclitaxel), dropping 28% to $175 million; and Paraplatin, tumbling 76% to $42 million.
On a more positive note, worldwide sales of current growth drivers jumped to 47% of total pharmaceutical turnover versus 39% in the year-ago period. These include: the blood thinner Plavix (clopidogrel), sold under an alliance with Sanofi-Aventis, which grew 9% to $980 million; the antihypertensive Avapro/Avalide (irbesartan), also part of the Sanofi-Aventis alliance, up 4%, to $251 million; Abilify (aripiprazole) for schizophrenia, which leapt 58% to $260 million; Reyataz (atazanavir), a protease inhibitor for the treatment of HIV, jumping 66% to $176 million; and colorectal cancer drug Erbitux (cetuximab), sold almost exclusively in the USA, up 27% to $107 million.
And, despite the group’s disappointing third-quarter results and Pargluva setback, Mr Dolan remained upbeat, commenting: “Our strategy remains on track and our newer products delivered solid global sales performance during the quarter…And, our robust portfolio sets the stage for sustained growth for the future, with four new products launched in three years, three drugs currently under US regulatory consideration, and another possible filing within the next three months.”