Bristol-Myers Squibb Co. (BMY) said Thursday its first-quarter income plunged 36 percent amid patent losses, asset sales and increased litigation reserves.

Bristol said its net income fell to $621 million, or 32 cents a share, in the January-March quarter, down from $964 million, or 49 cents a share, a year earlier.

Earnings from continuing operations totaled 34 cents a share, meeting the expectations of analysts surveyed by Thomson Financial.

Sales fell 2 percent to $4.5 billion as the company continues to struggle with the loss of exclusivity on key drugs such as its HIV/ AIDS medicine Videx (search) and its Glucophage (search) family of diabetes medicines.

Revenues from Pravachol, its cholesterol medicine, sank 23 percent to $520 million as Pfizer Inc.'s (PFE) competing drug Lipitor (search) continues to dominate the market.

Sales of blood thinner Plavix (search) jumped 17 percent to $814 million. Bristol-Myers, which sells the drug in partnership with Sanofi-Aventis SA (search), scored a victory earlier this year when it won a patent challenge in Canadian Court. However, the patent is under challenge in the United States. And while Bristol-Myers Chief Executive Peter Dolan said he believed the patent was valid, he cautioned investors during a conference call that the Canadian victory doesn't mean a U.S. win.

However, some of the company's newer products had a strong quarter. Anti-psychotic drug Abilify's sales rose 63 percent to $188 million while revenue from AIDS treatment Rayataz essentially doubled to $149 million.

As Bristol-Myers continues to struggle with patent losses, it is in the midst of a restructuring to streamline the company and focus on 10 disease areas, down from around 30.

The New York-based company said milestone payments to partners working on drug projects totaled $82 million.

Meanwhile, Bristol-Myers said it is subject to a significant number of pending lawsuits, claims and investigations and added $14 million to its legal reserves.

Bristol-Myers shares fell 23 cents to $25.53 in morning trading on the New York Stock Exchange.