Possible delay for Bristol cancer-drug causes jitters
(Adds analyst comments, details on nivolumab; updates share movement)
By Ransdell Pierson
April 29 (Reuters) - Bristol-Myers Squibb Co reported higher-than-expected quarterly earnings, helped by cost cuts and lower taxes, but sparked concerns over a possible delay in completing its marketing application for a high-profile cancer drug.
Shares of the U.S. drugmaker, whose sales missed Wall Street estimates, were down 3.6 percent at $48.54 in afternoon trading on Tuesday.
Bristol-Myers said it had earned $937 million, or 56 cents per share, in the first quarter, compared with $609 million, or 37 cents per share, a year earlier.
Excluding gains from the recent sale of its diabetes drug business to longtime partner AstraZeneca Plc (NYSE: AZN - news) and other special items, Bristol-Myers earned 46 cents per share. Analysts on average were expecting 43 cents, according to Thomson Reuters (Frankfurt: TOC.F - news) I/B/E/S.
Bristol-Myers said it would begin its U.S. marketing application for lung cancer treatment nivolumab within a few days but would not complete the "rolling submission" of clinical trial data until the end of the year.
Sanford Bernstein analyst Tim Anderson said the prolonged submission process implied a slight delay and that the U.S. Food and Drug Administration might be requiring more clarity on results from of the study.
"Bristol-Myers would not provide details on what exactly the FDA might want to see," Anderson said in a research note. But the company, in a conference call with industry analysts, said trial results suggested there were lasting responses to nivolumab among patients receiving it.
Deemed a potential blockbuster, nivolumab is a member of a promising new class of cancer treatments called PD1 inhibitors, which allow the immune system to recognize cancer cells and go after them.
Despite the year-end timeline for completing the marketing application, JPMorgan analyst Chris Schott said he remained confident in nivolumab and other immuno-oncology drugs that have become Bristol-Myers' biggest focus.
"In our view, nivolumab development and the broader immuno-oncology opportunity remain the core story for Bristol-Myers shares," Schott said.
Bristol-Myers raised the lower end of its 2014 profit forecast to $1.70 a share, excluding special items, from $1.65 while keeping the top end at $1.80.
First (Other OTC: FSTC - news) -quarter sales fell 1 percent to $3.81 billion, about $80 million shy of Wall Street expectations.
Sales of leukemia treatment Sprycel rose 26 percent to $342 million, while sales of melanoma treatment Yervoy fell 8 percent to $271 million. Rheumatoid arthritis treatment Orencia rose 7 percent to $363 million.
AWAY FROM MEGA-DEAL FRAY
A kind of merger fever seems to have swept the drug industry in the past week, with Pfizer Inc (NYSE: PFE - news) on Monday disclosing it had been rebuffed after offering to pay almost $100 billion to acquire AstraZeneca.
Last week, Canada's Valeant Pharmaceuticals and activist investor Bill Ackman said they had made an unsolicited $47 billion bid to buy Botox maker Allergan Inc (NYSE: AGN - news) .
By contrast, Bristol-Myers is known for steadily pursuing smaller deals, which it calls its "string of pearls" strategy.
In keeping with that pattern, Bristol-Myers on Tuesday said it would spend $175 million to buy privately held iPierian and its early-stage drugs to treat neurodegenerative diseases, including palsy. The purchase price ultimately could include up to $550 million more in milestone payments, plus royalties. (Reporting by Ransdell Pierson, Editing by Franklin Paul and Lisa Von Ahn)
