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.