TRENTON, N.J. (AP) - Bristol-Myers Squibb Co. reported a 21.5 percent drop in its fourth-quarter profit despite higher drug sales, because the year-ago results had a $411 million tax benefit from writing off a failed experimental medicine.
The drugmaker's adjusted results easily beat Wall Street expectations, but that performance was overshadowed by investor concerns about the pace of a highly anticipated study in lung cancer patients. Bristol-Myers shares fell more than 5 percent after the company declined to commit to a timeline for moving ahead with the study.
Bristol-Myers officials told analysts on a call that the company was not yet ready to move into late-stage testing of a lung cancer treatment combining two cancer medications: Yervoy and nivolumab. The company said it would continue mid-stage testing of the combination, sparking analyst worries that unexpected issues might be holding up testing. Both drugs work by rallying the body's immune system to fight off cancer. Yervoy is already approved to treat melanoma, and nivolumab is being studied to treat several other forms of cancer.
Citi analyst Andrew Baum said that the slower-than-expected pace of the study may be related to Yervoy's side effects, which can include inflammation of the colon, liver and skin.
Company shares fell $3.01, or 5.6 percent, to close at $50.94 for the day.
Bristol-Myers executives also discussed the recent announcement of a $4.1 billion deal involving its diabetes treatments.
As the next step in its ongoing makeover - from a producer of drugs for the masses to a creator of specialty drugs for complex disorders - Bristol-Myers agreed to sell to partner AstraZeneca PLC its share of their diabetes medicine business by March 31. Two drugs they developed were just approved this month: Farxiga in the U.S. and combination diabetes drug Xigduo in the European Union.
On Friday, New York-based Bristol-Myers reported net income of $726 million, or 44 cents per share, down from $925 million, or 56 cents per share, a year earlier. Excluding one-time items, adjusted income was $842 million, or 51 cents per share. That was 8 cents better than analysts surveyed by FactSet had expected.
Revenue totaled $4.44 billion, up 6 percent. Analysts expected $4.31 billion.
Revenue was driven by higher sales for HIV drug Sustiva, hepatitis B treatment Baraclude and rheumatoid arthritis drug Orencia. Its top seller, schizophrenia drug Abilify, saw sales slip 22 percent to $635 million because of a renegotiated revenue-sharing deal with a partner.
Generic competition has decimated sales of its former blockbusters, blood thinner Plavix and blood-pressure drug Avapro. And Eliquis, part of a new generation of clot-preventing drugs that Bristol-Myers and partner Pfizer Inc. got approved a year ago, brought Bristol just $71 million.
For all of 2013, Bristol-Myers earned net income of $2.56 billion, or $1.54 per share, on revenue of $16.39 billion.
It forecast 2014 adjusted earnings per share of $1.65 to $1.80; analysts expect $1.78.
AP Writer Matthew Perrone contributed to this story from Washington.
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