Bristol-Myers 4th-qtr profit rises on higher sales of key drugs, gain from Mead Johnson sale

Bristol-Myers 4Q profit rises on sales boost, gain

TRENTON, N.J. — Stronger sales of nearly all its medicines and a multibillion-dollar, one-time gain brought drugmaker Bristol-Myers Squibb Co. a huge jump in fourth-quarter profit, the company said Thursday.

The maker of blockbuster blood thinner Plavix said its net income was $8.03 billion, or $4.06 per share. In December Bristol-Myers sold its interest in infant formula maker Mead Johnson for a gain of $7.2 billion, or $3.62 per share.

The sale was the last step to transform Bristol-Myers into a pure biopharmaceutical company. Bristol now has about $9.9 billion available for deals, and is “out hunting,” Chief Executive Jim Cornelius said.

“Here in 2010 we are 100 percent biopharma (and) lean and flexible,” he told analysts. “We have what we need to execute our strategy.”

In the fourth quarter, the company’s sales totaled $5.03 billion, up 11 percent from $4.54 billion in 2008’s fourth quarter, boosted by about 4 percentage points by favorable currency exchange rates. Sales were led by double-digit jumps in sales for Plavix and HIV treatments Reyataz and Sustiva. Only cancer drug Erbitux, which Bristol-Myers markets jointly with Eli Lilly & Co., saw a dip in sales as the overall market for colorectal and head and neck cancer drugs declined.

Bristol posted income from continuing operations of $928 million, or 47 cents per share, excluding several other one-time items.

Analysts surveyed by Thomson Reuters had been expecting adjusted earnings per share of 41 cents, or 6 cents less, on sales of $4.99 billion.

Still, analysts say Bristol beat the earnings-per-share forecast because its tax rate was so much lower than expected that it added 6 or 7 cents to earnings per share.

“Bristol-Myers has one of the most troubling financial outlooks through 2015,” mainly because of looming generic competition for Plavix, wrote Sanford Bernstein analyst Timothy Anderson. “However, there appears to be a two-year window of growth … in 2010 and 2011 before this collapse in EPS begins.”

Bristol-Myers said it expects earnings per share in 2010 to range from $2.15 to $2.25, excluding one-time items and any impact of a potential health care overhaul. That’s in line with analysts’ average forecast of $2.19 per share.

In the fourth quarter, Plavix, an anticlotting pill for preventing heart attacks — the world’s second-best-selling drug — brought in $1.62 billion in sales, up 10 percent. Sales rose to $707 million for schizophrenia and bipolar disorder drug Abilify, $339 million for blood pressure drug Avapro, $388 million for Reyataz, $358 million for Sustiva and $212 million for hepatitis B treatment Baraclude.

However, its heavily touted new Type 2 diabetes drug Onglyza brought in only $4 million — far below analysts’ forecasts of $30 million to $91 million. It’s competing with Merck & Co.’s popular Januvia.

Cornelius and other executives defended ONglyza, saying sales of new drugs now grow slowly as insurers decide whether to pay for them.

Meanwhile, Bristol and Lilly restructured Bristol’s 2001 collaboration deal with ImClone Systems Inc. regarding Erbitux and a similar, successor cancer drug called necitumumab. Bristol and ImClone had jointly developed Erbitux, and Bristol retained some rights when Lilly bought ImClone in 2008. Under the new deal, Bristol will pay some costs for testing of necitumumab and, if it’s approved, will get 55 percent of future sales in the U.S., Canada and Japan.

For the full year, Bristol reported net income of $10.61 billion, or $5.34 per share, on revenue of $18.81 billion. In 2008, the company posted net income of $5.25 billion, or $2.62 per share, on revenue of $17.72 billion.

Shares of Bristol-Myers fell 3 cents to $24.27.