Updated from 8 a.m. EDT
Generic competition drove down sales and earnings for
during the third quarter, the company said Thursday, but profits still beat estimates.
Copycat versions of the cholesterol treatment Pravachol and the anticoagulant Plavix played a big role in a profit decline to $338 million, or 17 cents a share, from the year-ago quarter's $964 million, or 49 cents a share. The year-ago quarter was aided by a big one-time gain from the sale of the consumer-products business.
Excluding certain items, earnings fell to 22 cents from 31 cents, although the company beat the 20-cent Thomson Financial target. Sales dropped to $4.15 billion from $4.77 billion. Analysts had forecast sales of $4.2 billion for the three months ended Sept. 30.
Expected generic competition caused Pravachol's sales to plunge 64% year over year to $192 million. Pravachol lost U.S. patent protection in April. Surprise competition hit Plavix, whose sales fell 36% from last year to $630 million. U.S. sales were down 43% to $474 million.
A bungled negotiation with Canadian generic-drug company
led to a
low-price version of Plavix being sold in the U.S. for three weeks in August.
Although a court temporarily halted those sales, there's enough generic Plavix inventory to affect the brand-name drug's sales in the fourth quarter and the first quarter next year, Bristol-Myers said. The company licenses the drug from
Andrew Bonfield, the chief financial officer, told analysts he can't assess how much generic product is still available. He said low-price copies are accounting for 70% to 75% of the prescriptions written for the anticoagulant, whose generic name is clopidogrel.
Bristol-Myers also said it was raising its full-year earnings per share estimate to a range of $1.02 to $1.07, excluding one-time items, up from a Sept. 1 forecast of "no less than 95 cents." That 95-cent guidance
was issued after the Apotex problems unfolded. Previously, the full-year forecast had been for a profit of $1.15 to $1.25.
Bristol-Myers and Sanofi-Aventis head to court Oct. 31 to ask that a preliminary injunction remain in effect against Apotex until a patent-challenge trial is held. The trial is scheduled for January.
If it loses either court appearance, Bristol-Myers said the impact "could be material" to its financial condition and liquidity." Plavix is its biggest product.
More uncertainty remains for Plavix, including a
Justice Department investigation of Bristol-Myers and Sanofi-Aventis over the Apotex deal.
The New York-based company also is being investigated to determine if the proposed Apotex deal violated a previous consent order and deferred prosecution agreement with the U.S. Attorney's Office in New Jersey signed last year. The settlement relates to an investigation of wholesale inventory activities and accounting practices.
The company said the probe has been expanded to include whether the Apotex deal violated federal securities laws under a wholesale inventory-accounting practices settlement made with the
Securities and Exchange Commission
in 2004. "It is not possible at this time reasonably to assess the outcome of the investigation or its impact," the company said.
Interim CEO James Cornelius met with analysts
for the first time, telling them that a search for a permanent chief executive is moving with "deliberate speed." He didn't offer a timetable for the board of directors to choose a successor to Peter Dolan,
who was pushed out last month amid revelations of the Apotex negotiations. Cornelius said internal and outside candidates are being considered.
Asked by one analyst if the company was a takeover target, Cornelius responded: "My words to employees -- we're not for sale." Bonfield quickly added that the board would have to consider any legitimate offers as a function of its fiduciary duties.
Excluding Pravachol, Plavix and all the legal issues, Bristol-Myers offered some encouraging news during the third quarter. Sales of the schizophrenia drug Abilify rose 20% from a year ago to $313 million, while sales of the HIV/AIDS drug Reyataz gained 32% to $233 million. Another AIDS drug, Sustiva, climbed 18% to $201 million. The blood pressure drugs Avapro and Avalide combined for sales of $277 million, up 10%.
Revenue from the cancer treatment Erbitux jumped 64% to $175 million. The company markets the drug under a license from
. Bristol also owns 17.1% of ImClone's stock.
The company didn't offer any comment -- and analysts didn't ask any questions -- about the recent turmoil surrounding ImClone as top executives and several board members have departed.
Corporate raider Carl Icahn has become chairman and interim CEO at ImClone.
Icahn, the second-biggest ImClone shareholder with about 14%, said Wednesday that one of his immediate goals is to investigate why the relationship between the two companies "has seriously deteriorated over the past few years."
Shares of Bristol-Myers slipped 8 cents to $24.58.