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Bristol-Myers Squibb's ($BMY) fourth-quarter sales are about as pure an example of generic erosion as we're likely to get. But the company's earnings rose, and newer drugs stepped up, deflecting attention away from the Plavix-oriented past. Was 2012 truly a "transition year" for Bristol-Myers, as CEO Lamberto Andreotti insists?

Let's look at the sales hole first. Plavix, the gold-standard clot-fighter that Bristol-Myers developed with Sanofi ($SNY), lost 97% of its sales year-over-year. The drug brought in a meager $49 million during the fourth quarter, as a host of generics makers siphoned off sales. The blood-pressure treatments Avapro and Avalide also lost ground to generics. In all, quarterly sales dropped 23%, to $4.19 billion.

But expectations were so low, thanks to that well-known generic competition, that those sales numbers were enough to beat analyst estimates. Profits surpassed expectations, too, in another twist: The company's expensive write-off of a failed hepatitis C treatment came with a tax benefit. And that lifted earnings to $925 million, or 56 cents per share, up from 50 cents last year.

The company's "transition" is built on newer drugs such as Yervoy, the company's melanoma drug, which helped shore up Q4 sales; it grew 47% to $211 million, bringing full-year sales up to $706 million. Its long-anticipating clot-fighting drug Eliquis finally won key approvals in the U.S. and Europe near year's end. And a diabetes treatment, Forxiga, got the OK in Europe, though it's still waiting for an FDA approval that may or may not come.

Other products with notable growth include the cancer treatment Sprycel, with a 24% increase in the quarter; the diabetes drugs Onglyza and Kombiglyze, with 29% growth; and Orencia, with a 26% increase. Sprycel ended the year in blockbuster territory, with just over $41 billion in worldwide sales; Orencia also passed the $1 billion mark to reach $1.2 billion globally.

Andreotti says those drugs are his transition team. With them, Bristol-Myers has "continued to build the post-Plavix portfolio and operating structure that provide a solid foundation for our future growth." That future isn't here yet, though, Sanford Bernstein analyst Tim Anderson figures. Look toward 2014, he says (as noted by Bloomberg). "The company is likely to have growth that finally starts to accelerate from 2013," Anderson wrote in a note to clients.

- get the release from Bristol-Myers
- see the Bloomberg story

Special Reports:  Plavix - The 15 best-selling drugs of 2012 | Bristol-Myers Squibb - 10 Largest U.S. Patent Losses

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