Bristol-Myers shares hit by decline of Yervoy melanoma drug
By Ransdell Pierson (Reuters) - Bristol-Myers Squibb Co reported disappointing second-quarter sales of its Yervoy melanoma treatment on Thursday, raising concerns about the long-term prospects for one of its most important cancer medicines and sending its shares lower. Sales of Yervoy, often used in combination with either Bristol-Myers' newer Opdivo immuno-therapy or with Merck & Co's similar Keytruda, fell 19 percent to $241 million. BMO Capital Markets analyst Alex Arfaei said Yervoy sales were about $50 million below Wall Street forecasts, as doctors used Optivo or Keytruda instead, as standalone treatments. All three medicines work by taking the brakes off the immune system. "Yervoy appears to be rapidly losing share to (Opdivo and Keytruda)" outside the United States, Arfaei said in a research note. The company's shares were down 1.8 percent at $75.09 in late morning trading. Company revenue jumped 17 percent to $4.87 billion, about $200 million above analyst predictions. Still, most of the unexpected sales gains came from hepatitis C medicines that are expected to soon lose ground to newer treatments. Bristol-Myers' most important medicine is Opdivo, a so-called PD-1 inhibitor that is also approved to treat lung cancer and kidney cancer. Approved in late 2014, its sales hit $840 million in the quarter and is expected to keep growing by leaps and bounds despite competition from Merck's Keytruda. Bristol-Myers shares trade at about 23 times the company's expected 2017 per-share earnings, well above the approximate price-earnings ratio of 16 for its large rivals, based on optimism for widening use of Opdivo and Yervoy. Strong growth was seen for Eliquis, a pill co-marketed by Pfizer Inc, which is used to prevent blood clots in patients with an irregular heartbeat called atrial fibrillation. Its sales soared 78 percent to $777 million, helped by clinical data that suggest it is safer and more effective than rival new oral therapies. Sales of Orencia, used to treat rheumatoid arthritis, rose 29 percent to $593 million, about $70 million above Wall Street forecasts. Bristol-Myers earned $1.17 billion, or 69 cents a share, compared with a loss of $130 million, or 8 cents a share, a year earlier, when it took a big acquisition-related charge. Excluding special items, Bristol-Myers earned 69 cents per share, exceeding the average analyst estimate of 67 cents, according to Thomson Reuters I/B/E/S. Bristol-Myers said it now expects 2016 earnings of $2.55 to $2.65 per share, slightly higher than its earlier forecast of $2.50 to $2.60 per share. (Reporting by Ransdell Pierson in New York; Editing by Bernadette Baum)
