Bristol-Myers smashes Q2 as hep C meds rake in overseas sales

Here's an earnings trend-buster: Bristol-Myers Squibb ($BMY) trounced expectations for the second quarter and hiked its full-year sales forecast by more than $1 billion. And to do that, the company overcame a couple of big challenges that took the wind out of its Big Pharma rivals: Generic competition for one of its former blockbusters, and a major hit from the strong dollar.

It was the company's hepatitis C franchise that delivered the biggest new punch, with sales of $479 million. And that's without any sales in the U.S., where Daklinza (daclatasvir) and Sunvepra (asunaprevir) haven't yet won FDA approval. So far this year, the hep C drugs have racked up $743 million in sales in Japan and Europe.

Plus, the anticoagulant Eliquis more than doubled its sales--to $437 million--as a major marketing push continues to pay off. The closely watched cancer immunotherapy Opdivo, approved late last year, added $122 million--ahead of general expectations, but below a couple of analysts' estimates. And the anti-inflammatory drug Orencia ginned up 15% growth to $461 million.

All of that helped overcome an 81% drop in sales of Abilify, the company's former top-seller, which managed $107 million in Q2 sales, down from $555 million. And it overrode a 9% hit to sales from the strong dollar; at constant exchange rates, sales would have grown by 16%.

There was a shadow on Q2, however, in the form of declining sales of Yervoy, the melanoma immunotherapy that's now competing against a new generation of immuno-oncology treatments. Sales of that med slipped a bit in the U.S.--though they did grow worldwide a bit--as Merck & Co.'s ($MRK) Keytruda and Bristol-Myers' own Opdivo hit the market. The shortfall in Yervoy sales "likely reflects increased front-line use of PD-1 agents globally," Leerink Partners analyst Seamus Fernandez said in a Thursday investor note.

The company is working to position a Yervoy-plus-Opdivo combination for big things in melanoma and other cancers, which could help keep Yervoy in the game when other PD-1/PD-L1 meds make their debut, likely next year. Good thing, too, because the company also announced Yervoy had failed two Phase III trials, one in prostate cancer and the other in small-cell lung cancer.

Overall, Bristol-Myers sales came in at $4.2 billion, prompting the company to raise its full-year expectations to $15.5 billion to $15.9 billion. Previously, the company had expected sales of $14.4 billion to $15 billion. On the earnings side, Bristol-Myers now expects $1.70 to $1.80 per share. Fernandez called the Q2 numbers "striking," with sales $483 million above the firm's forecast. The hep C franchise beat Leerink's forecast by $279 million all by itself. But as the analyst pointed out, those drugs aren't likely to keep smashing expectations.

It's Opdivo that's the one to watch, of course, with new data likely to expand its use even further. First approved in melanoma, the drug has already won a new indication in lung cancer. Earlier this week, a kidney cancer study was stopped early because Opdivo was beating Novartis' ($NVS) Afinitor at prolonging patients' lives. Analysts see the drug bringing in $8 billion per year by 2020.

- see the release from Bristol-Myers

Special Reports: Top 15 pharma companies by 2014 revenue - Bristol-Myers

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