Drugmaker Bristol-Myers Squibb Inc. said Thursday that its fourth-quarter profit rose 8.6 percent, as reduced production and marketing costs and a big tax benefit offset a plunge in Plavix sales due to generic competition. Still, it beat Wall Street's expectations.
New York-based Bristol-Myers said its net income was $925 million, or 56 cents per share, up from $852 million, or 50 cents per share, a year earlier.
Excluding several one-time items totaling 9 cents per share, Bristol-Myers would have made $777 million, or 47 cents per share. That beat the 42 cents expected by analysts surveyed by research provider FactSet.
Revenue fell 23 percent, to $4.19 billion from $5.45 billion, as increasing generic competition wiped out virtually all sales of blood thinner Plavix. The pill for preventing heart attacks and strokes had been the second-bestselling drug in the world. Analysts had expected revenue of $4.13 billion.
In midafternoon trading, Bristol-Myers shares were up 85 cents, or 2. 4 percent, at $35.75.
Meanwhile, a Bristol-Myers spokeswoman confirmed that the company has reached an agreement in principle to settle lawsuits brought by patients harmed by a hepatitis C drug the company scrapped last August. The company said the drug, known as BMS-986094, caused heart and kidney damage in study participants, one of whom died of heart failure. At least nine were hospitalized.
On Thursday, the Wall Street Journal reported that Bristol-Myers had agreed to pay $80 million to 15 patients or families. The newspaper cited a letter sent to a study participant by the two lead attorneys for the plaintiffs.
Lawyers Robert Hilliard and Stephen Sheller both declined to comment for the paper.
Plavix, which Bristol-Myers jointly markets with partner Sanofi SA of France, got U.S. generic competition in May. By the fourth quarter, Bristol's revenue from Plavix sales in the U.S. plunged 99 percent, to just $20 million, and its total Plavix revenue was down 97 percent to $49 million — from $1.67 billion in 2011's fourth quarter.
Blood pressure drugs Avapro and Avalide, which Bristol also jointly markets with Sanofi, also are being squashed by generic competition that began last March. Bristol's total revenue from them fell 57 percent to $84 million.
The patent expirations allowed Bristol-Myers to sharply cut costs for production, marketing and advertising. The company also got a significant boost in the latest quarter from a $411 million income tax benefit, a big swing from its $363 million tax bill at year earlier.
A half-dozen drugs, mostly newer products, posted double-digit sales increases in the fourth quarter, but they can't begin to make up for the lost Plavix and Avapro revenue.
Abilify, for schizophrenia and bipolar disorder, had sales jump 11 percent to $819 million, while sales of hepatitis B drug Baraclude rose 13 percent to $360 million. Rheumatoid arthritis drug Orencia's sales rose 26 percent to $325 million and sales jumped 47 percent to $211 million for breakthrough melanoma drug Yervoy.
However, transplant rejection drug Nulojix, approved in June 2011, generated just $4 million in the fourth quarter and $11 million for all of 2012.
"Bristol-Myers Squibb had a strong finish to an important year of transition," CEO Lamberto Andreotti said in a statement. "In 2012 we continued to effectively execute our strategy and continued to build the post-Plavix portfolio and operating structure that provide a solid foundation for our future growth."
Bristol's biggest hopes to revive sales come from two drugs approved at the end of 2012, Eliquis and Forxiga, followed by two drugs in midstage patient testing, for hepatitis C and the bone marrow cancer multiple myeloma.
Forxiga, a once-a-day pill for adult Type 2 diabetes patients, was approved in the European Union in November. It's the first drug in a new class called SGLT2 inhibitors. Known chemically as dapagliflozin, Forxiga works independently of insulin to remove excess blood sugar from the body differently than other Type 2 diabetes drugs. Bristol developed it with partner AstraZeneca PLC. The two companies plan in mid-2013 to submit new data and again seek U.S. approval, after the Food and Drug Administration rejected the drug last January.
Eliquis, part of a heavily touted new generation of anticlotting drugs, was developed with Bristol's partner Pfizer Inc. After being rejected by the FDA twice as the agency awaited additional research data, Eliquis finally got approval on Dec. 28 for treating the most common type of irregular heartbeat, atrial fibrillation, in patients at risk for strokes or dangerous clots.
While analysts generally consider Eliquis the best of three new anticlotting drugs , the other two — Pradaxa, from German drugmaker Boehringer Ingelheim, and Xarelto from partners Johnson & Johnson and Bayer Healthcare — have a big start. That means Bristol and Pfizer could have a tough time persuading patients and doctors satisfied with Xarelto or Pradaxa to switch to Eliquis.
Bristol-Myers said that in 2013 it expects earnings per share of $1.54 to $1.64, or $1.78 to $1.88 excluding charges, and revenue of $16.2 billion to $17 billion. Analysts had expected adjusted earnings of $1.84 per share on revenue of $16.55 billion.
For all of 2012, Bristol's net income fell 47 percent to $1.96 billion, or $1.16 per share. Revenue dropped 17 percent from 2011, to $17.62 billion.
Linda A. Johnson can be followed at https://twitter.com/LindaJ_onPharma