Possible delay for Bristol cancer-drug causes jitters

Reuters - UK Focus

(Adds analyst comments, details on nivolumab; updates sharemovement)

By Ransdell Pierson

April 29 (Reuters) - Bristol-Myers Squibb Co reported higher-than-expected quarterly earnings, helped by costcuts and lower taxes, but sparked concerns over a possible delayin completing its marketing application for a high-profilecancer drug.

Shares of the U.S. drugmaker, whose sales missed Wall Streetestimates, were down 3.6 percent at $48.54 in afternoon tradingon Tuesday.

Bristol-Myers said it had earned $937 million, or 56 centsper share, in the first quarter, compared with $609 million, or37 cents per share, a year earlier.

Excluding gains from the recent sale of its diabetes drugbusiness to longtime partner AstraZeneca Plc (NYSE: AZN - news) and otherspecial items, Bristol-Myers earned 46 cents per share. Analystson average were expecting 43 cents, according to Thomson Reuters (Frankfurt: TOC.F - news) I/B/E/S.

Bristol-Myers said it would begin its U.S. marketingapplication for lung cancer treatment nivolumab within a fewdays but would not complete the "rolling submission" of clinicaltrial data until the end of the year.

Sanford Bernstein analyst Tim Anderson said the prolongedsubmission process implied a slight delay and that the U.S. Foodand Drug Administration might be requiring more clarity onresults from of the study.

"Bristol-Myers would not provide details on what exactly theFDA might want to see," Anderson said in a research note. Butthe company, in a conference call with industry analysts, saidtrial results suggested there were lasting responses tonivolumab among patients receiving it.

Deemed a potential blockbuster, nivolumab is a member of apromising new class of cancer treatments called PD1 inhibitors,which allow the immune system to recognize cancer cells and goafter them.

Despite the year-end timeline for completing the marketingapplication, JPMorgan analyst Chris Schott said he remainedconfident in nivolumab and other immuno-oncology drugs that havebecome Bristol-Myers' biggest focus.

"In our view, nivolumab development and the broaderimmuno-oncology opportunity remain the core story forBristol-Myers shares," Schott said.

Bristol-Myers raised the lower end of its 2014 profitforecast to $1.70 a share, excluding special items, from $1.65while keeping the top end at $1.80.

First (Other OTC: FSTC - news) -quarter sales fell 1 percent to $3.81 billion, about$80 million shy of Wall Street expectations.

Sales of leukemia treatment Sprycel rose 26 percent to $342million, while sales of melanoma treatment Yervoy fell 8 percentto $271 million. Rheumatoid arthritis treatment Orencia rose 7percent to $363 million.

AWAY FROM MEGA-DEAL FRAY

A kind of merger fever seems to have swept the drug industryin the past week, with Pfizer Inc (NYSE: PFE - news) on Monday disclosingit had been rebuffed after offering to pay almost $100 billionto acquire AstraZeneca.

Last week, Canada's Valeant Pharmaceuticals andactivist investor Bill Ackman said they had made an unsolicited$47 billion bid to buy Botox maker Allergan Inc (NYSE: AGN - news) .

By contrast, Bristol-Myers is known for steadily pursuingsmaller deals, which it calls its "string of pearls" strategy.

In keeping with that pattern, Bristol-Myers on Tuesday saidit would spend $175 million to buy privately held iPierian andits early-stage drugs to treat neurodegenerative diseases,including palsy. The purchase price ultimately could include upto $550 million more in milestone payments, plus royalties. (Reporting by Ransdell Pierson, Editing by Franklin Paul andLisa Von Ahn)

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