Millennium Beats Estimate Despite Widening Loss

Millennium Pharmaceuticals

(MLNM)

reported a wider first-quarter net loss as the biotech firm digests its acquisition of

Cor Therapeutics

.

Millennium's first-quarter net loss, minus a host of charges, grew to $56.3 million, or 22 cents per share, compared to a net loss of $34.2 million, or 16 cents per share, in the year-ago quarter.

The company's pro forma net loss beat by 2 cents analysts' net loss estimate of 24 cents per share, according to Thomson Financial/First Call.

The $1.9 billion purchase of Cor Therapeutics was completed in February, which resulted in a one-time charge of $242 million during the first quarter. But the deal also gave Millennium a marketed drug to add to its roster -- the blood-clot fighter Integrilin -- that helped the company boost its top line. Millennium and

Schering-Plough

(SGP)

split evenly revenue from Integrilin, which is used mainly by doctors in patients undergoing angioplasty.

Total first-quarter revenue rose 36% to $68.6 million, compared to sales of $50.4 million in the year-ago quarter.

Total Integrilin sales were $68 million during the quarter, handily beating year-over-year comparisons but up slightly from the $67 million in total Integrilin sales in the fourth quarter. The $34 million in Integrilin revenue recorded by the combination of Millennium and Cor Therapeutics in the first quarter is down from $35.9 million in revenue recorded in the fourth quarter.

Millennium has been trying to sell Wall Street on 30% sales growth for Integrilin over the next several years -- a bullish forecast that has not gone over very well. Most analysts believe Integrilin sales will grow more modestly -- 15% to 20% -- because of a medical trend towards increased use of rival drugs, most notably

Bristol-Myers Squibb's

(BMY) - Get Report

Plavix.

Tuesday, Millennium reiterated 2002 total Integrilin sales growth of 30% to $300 million, which will result in $150 million in revenue flowing to the company. UBS Warburg analyst Andrew Gitkin believes Integrilin sales will grow 24% to $287.1 million in 2002. The drug's sales growth will then slow to 12% in 2003, reaching $327.1 million, he predicts. Gitkin rates Millennium a buy and his firm doesn't have a banking relationship with the company.

If there is heightened risk in Integrilin, there is equal enthusiasm for Millennium's most advanced cancer drug candidate, MLN-341. As reported by

TheStreet

yesterday,

preliminary results released in abstracts for the upcoming American Society of Clinical Oncology meeting provide solid evidence that MLN-341 is proving to be an effective new treatment for patients suffering from the blood cancer multiple myeloma.

Millennium gained control of MLN-341 as part of its 2000 acquisition of Leukosite. That deal also gave it control of another approved cancer drug, Campath, which it sold to partners last year.

Millennium was founded as a genomics company, with a mission to quickly turn targeted genetic information into new drugs. This strategy has proven to be far more difficult than originally envisioned. Like

Human Genome Sciences

(HGSI)

, Millennium hasn't had much luck pushing genomics-derived drugs into late-stage testing. But unlike Human Genome Sciences, the company has been able to play the mergers-and-acquisitions game well, buying up more "conventional" biotech companies to re-craft itself as a product company.

This about-face from its original corporate strategy has helped slow the freefall in its stock price. Millennium shares lost 60% of their value in 2001, but are down just 7% so far this year, closing Tuesday at $22.80 per share. The American Stock Exchange Biotech Index has dropped 20% this year.

By comparison, Human Genome Sciences, which yesterday reported another in a continuing series of drug development failures, has lost 48% of its value so far this year. Shares in the company

fell more than 50% in 2001.