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Bristol-Myers Posts 3.5 Percent Q1 Profit Dip Despite Strong Sales

Tue, 04/28/2009 - 4:41am
LINDA A. JOHNSON AP Business Writer TRENTON, N.J. (AP) — Strong sales of two blockbuster drugs helped boost first-quarter revenue for Bristol-Myers Squibb Co., but higher taxes and a litigation charge pulled down its profit by 3.5 percent. The maker of anti-clotting drug Plavix and psychiatric drug Abilify said Tuesday that its net income amounted to $638 million, or 32 cents per share. That was down from $661 million, or 33 cents a share, a year earlier. Revenue totaled $5.02 billion, up nearly 3 percent, from $4.89 billion in the first quarter of 2007. The company said sales would have been up 8 percent, excluding the effects of the strong dollar. Other drugmakers have been blaming disappointing results on the global recession and the strong dollar. Analysts surveyed by Thomson Reuters had expected slightly higher sales, at $5.13 billion, but Bristol-Myers managed to just beat their earnings per-share forecast. The New York-based company would have posted earnings per share of 48 cents, a penny over analysts' consensus of 47 cents, excluding a host of one-time charges totaling $320 million, or 16 cents per share. Those included a $104 million litigation charge, nearly all of it for settling a shareholder lawsuit, plus $29 million in restructuring charges and $145 million in payments to license experimental drugs. Revenue for the company's pharmaceuticals division was up 3 percent, at $4.32 billion. Revenue in the Mead Johnson division, which sells the Enfamil line and other nutritional products, dipped 1.4 percent to $693 million. In February, Bristol-Myers completed an initial public offering in which it sold 17 percent of Mead Johnson to the public, raising about $800 million, despite the difficult market for such offerings. Plavix sales in the quarter rose 10 percent, to $1.44 billion, and sales of Abilify, used to treat schizophrenia, bipolar disorder and depression, jumped 30 percent to $589 million. A couple of newer drugs also saw sales jump: 43 percent for rheumatoid arthritis treatment Orencia, to $124 million; 41 percent for Baraclude for hepatitis B infection, to $152 million, and 33 percent for cancer drug Sprycel, to $88 million. At the start of the second quarter, Bristol-Myers struck a deal with Japanese partner Otsuka Pharmaceutical Co. Ltd. to extend their partnership on Abilify, which Otsuka discovered, by 2½ years. Instead of ending in November 2012 — about six months after $5 billion-a-year Plavix gets generic competition and its revenues drop off — the marketing partnership will run until 2015. Bristol-Myers and Otsuka also will collaborate on Sprycel and a second Bristol-Myers cancer drug, Ixempra. Bristol-Myers boosted its research and development spending in the quarter by 18 percent, to $923 million. The increase was mainly for upfront payments to partner with ZymoGenetics Inc. for an experimental hepatitis C drug, and with two Japanese drug companies to develop a drug for maintaining normal heart rhythm in patients with a condition in which the heart's upper chambers beat erratically. Meanwhile, Bristol-Myers reduced marketing and overhead costs by 6 percent to $1.1 billion, and boosted its gross profit margin to 71.8 percent by holding down manufacturing costs and raising prices for Plavix, Sprycel and Avapro. The company also backed its forecast for earnings per share of $1.58 to $1.73 for the year.
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