A slowing economy failed to slow drug sales, with three pharmaceutical giants Wednesday all reporting strong earnings growth. Bristol-Myers Squibb ( BMY) posted first-quarter earnings that beat Wall Street estimates by a penny, while Pharmacia ( PHA) and American Home Products ( AHP) reported results in line with expectations. The companies said earnings growth targets were met because of strong sales of prescription drugs, despite hits taken because of negative foreign exchange factors.
New York-based Bristol-Myers posted a 10% year-over-year jump in first-quarter earnings from continuing operations of $1.24 billion, or 63 cents per share. That compares with earnings of $1.13 billion, or 56 cents per share, in the first quarter of 2000. The company previously announced that it plans to spin off or sell its Clairol beauty products and Zimmer orthopedic units, which are not included in the company's earnings results. Sales from continuing operations grew 5% to $4.7 billion in the first quarter, compared with $4.5 billion from the year-ago quarter. U.S. pharmaceutical sales increased 13% while international sales fell 4%. Overseas sales would have risen 4% if not for negative foreign exchange factors, the company said. Strong drug sale growth was led by a 31% jump in sales of the Glucophage family of drugs to treat noninsulin-dependent diabetes to $557 million, compared with the year-ago quarter. Worldwide sales of the cholesterol-lowering drug Pravachol increased 10% to $507 million in the first quarter. Bristol-Myers is taking a hit from generic drug competition. Sales of the anticancer drug Taxol dropped 14% to $330 million, including a 28% decrease in the U.S., where Ivax Corp. ( IVX) sells a generic form of Taxol. Generic forms of the company's anti-anxiety drug Buspar also hit the market at the end of the first quarter. Buspar sales increased 25% to $203 million in the quarter, but sales will drop now that the generic version is on the market. Looking ahead, the drugmaker said it remains comfortable with current consensus estimates of 2001 earnings of $2.41 per share. Shares in Bristol-Myers were up $1.10, or 2%, to $56 in recent trading.
The Peapack, N.J.-based drug company said first-quarter profits on an adjusted basis rose 19% to $423 million, or 32 cents per share, compared with the year-ago quarter. Results were adjusted to exclude about $145 million in restructuring and merger-related charges related to the company's purchase of Monsanto ( MON) last year. Total sales were $4.5 billion, an 8% jump over the first quarter 2000. Net sales for Pharmacia's pharmaceutical business rose 13% to $3.2 billion. Agricultural sales, primarily the Monsanto business, fell 1% to $1.3 billion Drug sales were led by $649 million in first quarter sales for the arthritis drug Celebrex, a 24% increase over the year-ago quarter. Sales of Ambien, a sleeping aid, rose 114% to $215 million. Glaucoma drug Xalatan posted a 24% jump in sales from the same quarter last year to $200 million. On its conference call, Pharmacia executives said future guidance remains unchanged, with full-year 2001 earnings growth of about 20% and 15% to 17% growth in second-quarter earnings from the year-ago quarter. Wall Street is looking for the company to post second-quarter and full-year 2001 earnings of 63 cents per share and $1.75 per share, respectively. Shares in Pharmacia were up 54 cents, or just over 1%, to $48.55 per share in recent trading.
American Home Products
The Madison, N.J.-based company said first-quarter profits rose 16% to $733.6 million, or 55 cents per share, compared with $634.9 million, or 48 cents per share, in the prior year. Worldwide net revenue rose 8% to $3.45 billion in the first quarter, compared with one year ago. Worldwide human drug sales increased 12%, primarily due to higher sales of Prevnar, the company's pneumococcal vaccine, as well as the ulcer drug Protonix, the Premarin line of female hormone replacements and Effexor XR, used to treat depression. Sales of the company's oral contraceptives and its meningitis drug were lower in the first quarter, and the company took a 3% negative hit on overseas sales due to unfavorable foreign exchange rates. On its conference call, American Home executives said they were sticking to forecasts for 2001 earnings of $2.15 per share to $2.20 per share. Analysts are expecting 2001 earnings of $2.19 per share, according to Thompson Financial/First Call. The company also said the $12.25 billion already set aside to settle its diet drug litigation should be enough to handle all claims. In the first quarter, the company paid out $4.1 billion in liabilities stemming from the recall of its appetite suppressants Pondimin and Redux, best known as the fen-phen diet drug combo. American Home shares were up $1.34, or 2.4%, to $55.69 in recent trading.