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Bristol-Myers profits beat estimates as it readies new immuno-harnessing cancer drug

Bristol-Myers 2013 Earnings Forecast Beats EstimatesBristol-Myers 2013 Earnings Forecast Beats Estimates
Lamberto AndreottiBloomberg--Getty Images

Bristol-Myers Squibb (BMY) beat expectations for its second-quarter earnings, bolstered by fast growth in sales of key cancer drugs Yervoy and Sprycel.

Earnings were 48 cents a share, excluding one-time items, topping the average analyst estimate of 45 cents, according to data compiled by Bloomberg. Yervoy sales were up 38% year-over-year to $321 million globally, compared with the average analyst estimate of $292 million. Sprycel sales grew 18% over the year to $368 million, slightly shy of the analysts’ expectations. Sales of Bristol-Myers’ best-selling drug Abilify, an anti-psychotic, dipped 1% to $555 million.

The New York City-based drug-maker’s bottom line suffered from a 49% increase in research and developments costs, including impairment and acquisition-related charges of $458 million, driving net income down 37% to $333 million, to 20 cents a share on a GAAP basis, from $535 million, or 32 cents a share, a year earlier.

Those factors also led it to cut its full-year guidance for earnings under U.S. Generally Accepted Accounting Principles by 12% to a range of $1.50-$1.60. However, it kept its non-GAAP guidance unchanged. The market prefers to follow the non-GAAP measure on the view that it better reflects the earnings potential of drugs under development.

More: Bristol-Myers Squibb: Big Pharma’s small wonder

Investors are carefully watching Bristol-Myers’ development of its nivolumab drug Opdivo, a cancer therapy that uses the body’s immune system to fight off the disease. The drug was approved in Japan this month for the treatement of certain-types of melanoma, making it the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world.

Bristol-Myers is partnering with Ono Pharmaceutical, a Japanese drug maker, to bring Opdivo, Yervoy and three early-state immune-targeting cancer drugs to the Asian market, the companies announced Wednesday.

In the U.S. market, Bristol-Myers will submit a biologics license to the Food and Drug Administration for Optivo in the third quarter to seek approval for its use in treating melanoma. This will be the second regulatory submission underway for Opdivo in the U.S. The company is also seeking approval for the drugs use in treating a specific type of lung cancer.

Opdivo’s approval would give Bristol-Myers a potent treatment, which is being tested alone and in combination with other drugs in its portfolio, that will help boost sales.