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Earnings Preview: Bristol-Myers to report 1Q

Tue, 04/27/2010 - 4:17am
LINDA A. JOHNSON - AP Business Writer - Associated Press

Bristol-Myers, a major drugmaker, reports its first-quarter results before the stock market opens Thursday.

WHAT TO WATCH FOR: Chief Operating Officer Lamberto Andreotti succeeds James Cornelius as Bristol-Myers CEO and is expected to address analysts during the company conference call. Andreotti is a key architect of its strategy to shed noncore businesses and turn itself into a biopharmaceutical company by buying biologic drugs and biotech companies.

Analysts will be listening for comments on whether the New York company will use any of its roughly $10 billion in cash and cash equivalents to buy some promising assets.

Company executives likely will discuss developments on some key drugs in development and the possible approval of a promising organ transplant medicine.

The Food and Drug Administration is to decide whether to approve belatacept, for preventing rejection of transplanted kidneys, by May 1. An FDA advisory panel voted 13-5 in March to approve the drug, which Bristol says is a big improvement over decades-old transplant drugs that cause nausea and, in a small number of patients, liver damage. Some panel members were concerned by the level of acute kidney rejection.

Meanwhile, the maker of Orencia for rheumatoid arthritis, Abilify for schizophrenia and cancer and HIV drugs plans to present multiple research studies in June at a top meeting of cancer specialists. The data includes late-stage studies on both an experimental drug for metastatic melanoma, ipilimumab, and use of its chronic myeloid leukemia drug Sprycel in new patients. Sprycel is now approved only for patients after another drug has failed to work.

Also in June, the company is slated to present late-stage research results at the American Diabetes Association meeting on an experimental type 2 diabetes drug, dapagliflozin, that would be the first in a new class. The daily pill works by helping the kidneys eliminate blood sugar.

WHY IT MATTERS: After a round of industry consolidation last year that solidified the positions of U.S. rivals Pfizer Inc. and Merck & Co. as the world's top two drugmakers, Bristol-Myers has fallen out of the top 15. Investors may feel it's time for Bristol to do another big deal.

Getting belatacept and other new drugs approved and on the market is crucial because Bristol-Myers will lose patent protection in 2012 for blockbuster blood thinner Plavix, the world's second-best-selling drug. Plavix, which the company markets with European partner Sanofi-Aventis SA, brought Bristol-Myers about $6 billion in sales last year, nearly a third of its total revenue.

Meanwhile, the company's top two officers are new, so analysts will be watching them closely. Besides the CEO change, Charles Bancroft, who had been serving as interim chief financial officer, got the job permanently on April 8. He replaced Jean-Marc Huet, who resigned at the end of 2009.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect earnings per share of 51 cents on revenue of $4.74 billion.

LAST YEAR'S QUARTER: Bristol-Myers reported profit of 32 cents per share on revenue of $5.02 billion.

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