Things looked bleak for Bristol-Myers Squibb as it reports its financial results for the third quarter. The revelation that it might pull the plug on its new drug Pargluva highlighted disappointing earnings results.
Bristol Myers Squibb posted lower-than-expected profits for the full year due to higher-than-anticipated taxes and increased promotional spending.
However, the company reported a 27 per cent increase in its third quarter profits largely due to the $569 million (€471 million) gain from the sale of its US and Canadian non-prescription businesses.
Disclosures that Bristol-Myers and partner Merck may have to run expensive and lengthy clinical studies for their diabetes drug, Pargluva, in order to receive regulatory approval was met with disapproval and the prospect of either company cutting their losses seems likely.
The company earned $964 million, or 49 cents a share, in the three months ended Sept. 30, up from $758 million, or 38 cents a share, a year ago.
Sales were $4.77 billion, down slightly from $4.78 billion, as the company, which makes Pravachol to lower cholesterol and the anticlotting agent Plavix, continues to struggle with generic competition.
Meanwhile Abbott Laboratories posted lower third-quarter earnings, decreasing 15 per cent from a year ago as expenses related to cost cuts offset revenue improvement.
Abbott's current crop of pipeline products should be able to see them through this difficult period as a host of pharmaceutical companies experiencing much the same thing.
Details of the company's recent setback for its prostate cancer drug Xinlay can't have helped things though. The Food and Drug Administration last week rejected Abbott's application to market Xinlay, questioning the drug's safety and effectiveness.
Net income declined to $680.7 million, or 44 cents per share, for the three months ended Sept. 30 from $804.1 million, or 51 cents per share, a year ago.
Revenue grew 15 per cent to $5.38 billion, driven by a 57 per cent increase in sales of rheumatoid arthritis drug Humira to $356 million.
By segment, Abbott's US pharmaceuticals sales rose 14.2 per cent in the third quarter to $1.92 billion, while international sales rose 17.7 per cent to $2.40 billion.
Global sales of heartburn treatment Prevacid fell 13.8 per cent to $613 million. Sales or arthritis drug Mobic rose 146.2 per cent to $310 million.
The world's largest biotechnology company, Amgen, reported a surge in third-quarter profits on double-digit sales growth of drugs to treat anaemia in chemotherapy patients and arthritis.
It reported a net profit of $967 million, or 77 cents per share, compared with a net profit of $236 million, or 18 cents a share, a year ago.
Sales of Aranesp, used to treat anaemia in cancer patients undergoing chemotherapy, jumped 38 per cent to $840 million in the quarter.
Johnson & Johnson said its sales of Procrit slipped 5 per cent to $844 million. J&J last week sued Amgen over its marketing practices, saying they violated antitrust laws.
Excluding expenses, Amgen earned $1.1 billion, or 85 cents a share, up from $839 million, or 64 cents, a year ago.
Genentech, the world's second- biggest biotechnology company, said third-quarter earnings rose 56 per cent as sales of its colon cancer drug Avastin and other cancer treatments continued to grow.
Net income increased to $359.4 million from $230.9 million in 2004. Revenue for the quarter rose 46 per cent to $1.75 billion
Avastin revenue climbed 78 per cent to $325.2 million and Herceptin breast-cancer drug sales rose 70 per cent to $215.1 million.
Sales of Rituxan for non-Hodgkin's lymphoma rose 16 per cent to $456.2 million for the quarter.
Sales were boosted by studies published this year that showed Avastin, introduced in 2004 for colon cancer, also fights breast and lung tumours.
New data also showed that Herceptin reduced the risk of breast cancer relapses when given to women after tumour surgery.
Sales of Tarceva, the company's new lung cancer treatment, were $73.2 million, up 4 per cent from the previous quarter.
Genentech had said in a conference call that it might run the risk of eventually becoming a victim of its own achievements.
"Positive revenue and earnings news could create the belief that this caliber of performance will continue, and the "success of Avastin and Herceptin may create unrealistic expectations," they added.