* Q1 EPS excluding items, $0.64 vs. $0.63 forecast
* Q1 sales rise 5 pct to $5.25 bln, matching forecast
* Avapro sales plunge 29 pct to $207 mln, hit by generics
* Shares slip 0.8 pct
By Ransdell Pierson
April 26 (Reuters) – Bristol-Myers Squibb Co said
first-quarter profit rose 10 percent, helped by higher sales for
its melanoma and leukemia drugs that cushioned the blow from
generic competition to its Avapro blood pressure treatment.
Avapro marks the beginning of Bristol’s “patent cliff,”
which is expected to worsen next month when its $7
billion-a-year Plavix blood clot preventer loses U.S. marketing
exclusivity and faces copycat rivals.
Company sales will come under additional pressure between
2013 and 2015, with the arrival of generic forms of its Sustiva
treatment for HIV and its Abilify schizophrenia drug, which
together now have annual sales of $4 billion.
But unlike many drugmakers whose earnings have been battered
in recent years due to loss of patent protection on their
biggest products, Bristol-Myers has a growing roster of new
medicines.
They include Yervoy, a new drug for melanoma, diabetes
treatment Onglyza, promising hepatitis C medicines and an
experimental blood clot preventer called Eliquis that could be
approved by late June and reap annual sales of more than $4
billion for Bristol-Myers and partner Pfizer Inc.
“Bristol has a great drug pipeline and is doing a lot better
than many other companies in having a next-generation of drugs
to weather its patent storm,” said Morningstar analyst Damien
Conover.
“We’re expecting relatively flat growth over the next three
years, with earnings bouncing back and forth” as older drugs
lose patent protection and newer ones come to the fore, Conover
said.
Bristol-Myers on Thursday said it expects full-year 2012
earnings of $1.90 to $2.00 per share, which would reflect a
decline of 12 to 16.5 percent from last year. Wall Street then
expects flat earnings in 2013.
A HIGH PREMIUM TO INDUSTRY
Bristol-Myers shares have risen sharply in the past few
years due to excitement about the company’s drug pipeline, but
have become slightly overvalued given the company’s limited
earnings-growth potential in coming years, Conover said.
He said company shares trade at about 17 times the company’s
expected 2012 per share earnings, too big a premium to the
average price-to-earnings ratio of 11 for other large
drugmakers.
Bristol’s global first-quarter revenue rose 5 percent to
$5.25 billion, matching Wall Street expectations, even as Avapro
sales fell 29 percent to $207 million, the company said on
Thursday.
Earnings rose 10 percent to $1.1 billion, or 64 cents per
share, 1 cent above the average analyst forecast compiled by
Thomson Reuters I/B/E/S. In the year-earlier quarter, the
company earned $986 million, or 57 cents per share.
Sales of Plavix, marketed in partnership with French
drugmaker Sanofi, slipped 4 percent to $1.69 billion
in the quarter. Leukemia drug Sprycel posted sales of $231
million, a 34 percent jump. Yervoy contributed $154 million, up
from $144 million in the prior quarter.
Company shares were down 0.8 percent to $34.01 in morning
trading on the New York Stock Exchange, amid a slight decline
for the drug sector.
