An upturn in sales of its antithrombotic blockbuster Plavix has lead to Bristol-Myers Squibb posting better-than-expected results for the first quarter.
Net income did indeed fall 3.4% to $690 million or $0.35 per share and sales slipped 4.3% to $4.48 billion, but the performance beat analysts’ expectations, helped in part to a favourable tax rate but also strong performances from a number of its drugs. Plavix (clopidogrel) revenues decreased 5% to $938 million, but this was a far stronger showing than in recent previous quarters.
B-MS' failure to stop Apotex from flooding the US market with its generic version of the drug last summer before an injunction was put in place cut badly into Plavix sales but there are now signs that the impact of copycat clopidogrel is wearing off and US prescription growth for the molecule accelerated during the quarter. All eyes are now on the outcome of the patent infringement case between B-MS (with partner Sanofi-Aventis) and Apotex, and most observers believe the New York-based firm and the Franco-German drugmaker will prevail.
However, generic competition battered sales of cholesterol-lowerer Pravachol (pravastatin), which lost US and some European patent protection last year and collapsed 75% to $135 million, while anticancer agent Taxol (paclitaxel) sank 24% to $111 million, due to increased competition in Europe and Japan.
Nevertheless there were a number of bright spots for B-MS, notably the performance of the antipsychotic Abilify (aripiprazole), up 29% to $366 million and the antihypertensive Avapro/Avalide (irbesartan), which increased 16% to $270 million. The firm's HIV drugs also made a solid contribution, with revenues from its Sustiva (efavirenz) franchise rising 29% to $226 million and Reyataz (atazanavir) up 27% to $263 million, while sales of cancer drug Erbitux (cetuximab) climbed 16% to $160 million.
Sales of Sprycel (dasatanib) for leukaemia, launched in June last year, rose to $21 million from $14 million in the fourth quarter, while Orencia (abatacept) for rheumatoid arthritis brought in $41 million, up from $5 million in the same period last year. Revenues from Baraclude (entecavir) for hepatitis B reached $45 million, compared to $11 million in first-quarter 2006.
The company also raised its outlook for earnings from continuing operations in 2007 to $1.24-$1.34 from $1.12-$1.22 per share, noting that sales of drugs that have lost patent protection are expected to moderate to $900 million-$1 billion, compared to $1.4 billion.
Cornelius chosen as permanent CEO
B-MS also decided it was a good time to announce that James Cornelius, who has served as interim chief executive since Peter Dolan was ousted in September following the generic Plavix debacle, has been chosen to stay in the post full-time for the next two years. Previous to joining the firm, as chief executive of medical device firm Guidant, Mr Cornelius oversaw its $27 billion sale to Boston Scientific, and many observers believed that his appointment would led to B-MS being more open to a takeover.
Rumours have abounded for months that Sanofi is on the verge of making a bid but the noises being made by Mr Cornelius suggest that he may not be so keen on selling off the firm, after he said on a conference call that the board is trying to run the business as “a free-standing independent company”. B-MS said he has overseen the first steps of a strategic review, including tightening fiscal controls, “enhancing the company's global reputation” and identifying its strengths “in an increasingly challenging healthcare environment,” adding that it will continue to evaluate strategic alliances, such as the one just signed with Pfizer for apixaban (see following story) and acquisitions to accelerate product development and sales growth.
However analysts are less than convinced and believe that Mr Cornelius was elected because of the dearth of other candidates for the CEO post. Barbara Ryan at Deutsche Bank Securities issued a note saying that “we view this as a purely cosmetic move to minimise the distractions and questions created by his interim status," while Tim Anderson at Prudential argued that the decision to appoint Mr Cornelius “will do little to stop the investment community's general belief that the company will be sold.”