NEW YORK – Bristol-Myers Squibb Co.'s exit from the diabetes business, plus higher taxes and research spending, combined to slash the drugmaker's second-quarter profit by 38 percent, but the company handily beat Wall Street's muted profit expectations.
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The maker of arthritis medicine Orencia and schizophrenia drug Abilify also lowered its profit forecast for 2014 by 20 cents, to a range of $1.50 to $1.60, saying it expects more restructuring charges and asset writedowns.
The New York-based drugmaker said Thursday that net income was $333 million, or 20 cents per share, down from $536 million, or 32 cents per share, a year earlier.
Excluding one-time items totaling $465 million, or 28 cents per share, net income would have been $798 million, or 48 cents per share. Analysts surveyed by FactSet were expecting 44 cents per share.
Total revenue dipped 4 percent, to $3.89 billion, just over the $3.86 billion analysts had expected.
Bristol-Myers is continuing a long-term transformation from producing pills for the masses to creating complex, expensive drugs for cancer and rare disorders. It's been investing significantly in the hot new field called immuno-oncology, or drugs that take a brake off the immune system so it can better fight cancer, and will soon seek approval for a melanoma drug in that new category called Opdivo.
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It's awaiting U.S. approval of a pair of hepatitis C drugs just approved in Japan, Daklinza and Sunvepra. They offer patients with the liver-destroying virus a much higher and faster chance of a cure than the long-time standard treatment — without the repeated injections and the nasty, flulike side effects that causes.
Meanwhile, as part of the business makeover, Bristol-Myers sold its half of its diabetes drug business to partner AstraZeneca PLC early this year and now receives just a small royalty — $27 million in the second quarter, compared to the $438 million it got from the partnership a year ago. Bristol-Myers noted that excluding the lost diabetes income, worldwide revenue was up by 7 percent.
In the quarter, combined sales of the company's three cancer drugs — Yervoy, Sprycel and Erbitux — jumped by 22 percent to $875 million, and Orencia sales jumped 14 percent to $402 million.
And after a slow start, the clot-preventing drug Bristol-Myers sells with partner Pfizer Inc., Eliquis, finally saw sales surge, to $171 million from $12 million a year ago. Bristol records all the sales and splits the profit with Pfizer.
On the down side, sales of top seller Abilify dipped 1 percent to $555 million, as Bristol-Myers lost marketing rights in Europe to a partner, and increased competition cut sales of HIV drugs Reyataz and Sustiva by more than 10 percent each.
In premarket trading .....