Bristol-Myers impresses with trimmed-down costs, pumped-up sales

Bristol-Myers Squibb's ($BMY) got some pumped-up sales to go along with its slimmed-down focus. In the fourth quarter, revenue increases and decreased costs helped the company beat Wall Street's earnings estimates on the way to zeroing in on its new-look pharma model.

Profits reached 51 cents per share, the company said Friday, topping Bloomberg's analyst estimates by 8 cents. They got a boost from a 7% spending dip in marketing, selling and administrative expenses as well as a 12% drop in research spending. "Operationally, BMY's execution on cost structure continues to impress," Leerink Swann analyst Seamus Fernandez wrote in a note to investors.

Sales, too, beat forecasts, growing 6% year-over-year to reach $4.44 billion--$116 million more than analysts projected. Cancer drugs Sprycel and Yervoy helped lead the way, with sales jumping 30% and 23%, respectively.

Cancer drugs--particularly immuno-oncology drugs like melanoma treatment Yervoy--are poised to play a stepped-up role down the line for the company as it transitions toward a specialty-care model. "We increasingly believe in the transformational potential of immunotherapy and of Yervoy as a cornerstone of that approach," CEO Lamberto Andreotti told investors on a Friday conference call.

BMS CEO Lamberto Andreotti

On the flip side, the company has recently made some moves away from other treatment areas, announcing in November it would halt discovery work in hepatitis C and diabetes with plans to eliminate a wider set of research work in neurosciences, excluding Alzheimer's, as the company moves forward. The next month, it sold its share of a 6-year-old diabetes partnership with AstraZeneca ($AZN)  for $4.1 billion.

"When you realize you are the furthest down the path of these cancer drugs, it makes sense to make that your focus," Edward Jones analyst Judson Clark told Bloomberg. "They're taking cues from what shareholders have told them they want, which is 'Let me diversify my own pipeline the way I want, and you focus on your area.'"

But that's not to say Bristol has forgotten about Eliquis, the anticoagulant it shares with Pfizer ($PFE). The drug did generate $71 million in Q4 sales, but it's still far from where analysts thought it would be when they declared it a future $3 billion-per-year blockbuster. But CFO Charles Bancroft told investors Friday that Bristol-Myers continued to make "significant progress among cardiologists" and that the drug is much better positioned, access-wise, this year than it was in 2013.

"We … remain firmly committed to Eliquis and together with Pfizer have decided to increase our resources behind it," Andreotti said.

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