NEW YORK – Bristol-Myers Squibb Co.'s (BMY) quarterly profit and 2005 forecast missed Wall Street estimates on Friday, a day after the company warned it may abandon an experimental diabetes drug, sending its shares down 3 percent.
The New York-based drugmaker late on Thursday said it may halt work on the diabetes drug it is developing with Merck & Co. (MRK), called Pargluva (search). U.S. regulators earlier this month said they are unwilling to approve it without additional heart-safety data.
"For all intents and purposes, Pargluva is now dead," said Deutsche Bank analyst Barbara Ryan, joining other Wall Street analysts who have now taken the drug out of their projections.
She said the drug's poor prognosis, combined with Bristol's "disappointing" new 2005 forecast, had shaken investors. "But the bigger concern is Pargluva."
Ryan said Merck, which may seek U.S. approval later this year for another diabetes drug of its own, is not as dependent on Pargluva to contribute to company earnings.
Bristol-Myers posted third-quarter income of $964 million, or 49 cents per share, compared with $755 million, or 38 cents per share, in the 2004 period.
But the results got a boost of $569 million from the sale of its North America consumer medicines business, and Bristol's revenue was unchanged, hurt by declining sales of drugs facing generic competition.
Excluding items, the drugmaker earned 31 cents per share, two cents below the consensus estimate, according to Reuters Estimates.
The company also forecast 2005 earnings from continuing operations will be in the middle of the company's previously announced range of $1.35 to $1.45 per share, excluding special items. That is below the average forecast of $1.44 per share among analysts polled by Reuters Estimates.
Quarterly sales from continuing operations were flat, at $4.8 billion, but would have fallen 1 percent if not for the weak dollar — which increases the value of overseas sales when converted back into U.S. currency.
Global sales of prescription drugs fell 2 percent to $3.8 billion. Drug sales slipped 3 percent in the United States, hurt by generic competition for cancer drug Paraplatin and HIV treatment Videx, as well as declining sales of cholesterol fighter Pravachol, which is losing ground to more potent rivals and facing generics in Europe.
Pravachol sales fell 12 percent to $527 million, while sales of cancer treatment Taxol fell 28 percent to $175 million due primarily to generic competition in Europe. Paraplatin sales plunged 76 percent to $42 million.
The company's biggest product, Plavix to prevent blood clots, jumped 9 percent to $980 million. Its Reyataz (search) treatment for HIV — whose once-daily dosing is an advantage over many rival medicines — saw sales jump 66 percent to $176 million.
At the close of trading on Thursday, company shares had fallen 15 percent so far this year, compared with a 4 percent decline for the American Stock Exchange Pharmaceutical Index .DRG> of large drugmakers.
The stock fell to $21 on Friday, from its close on Thursday of $21.67 on the New York Stock Exchange.