Bristol-Myers Squibb (NYSE: BMY) just keeps
chugging along.
It's facing a major loss of revenue when Plavix, which it
sells with
sanofi-aventis (NYSE: SNY), faces generic
competition in the U.S. in 2012, but until then things are
looking pretty good. Sales of the blood thinner were up 8%
for the third quarter despite new generic competition in
Europe. Clearly,
Eli Lilly 's (NYSE: LLY) new, competing blood
thinner, Effient, isn't doing much damage to Plavix
sales.
Overall, Bristol-Myers' revenue was up just 4% for the
quarter, but that was dragged down because Bristol-Myers
records a smaller fraction of sales from
Mead Johnson Nutrition (NYSE: MJN) since it
owns less of the company after
the IPOearlier this year. Sales of biopharmaceuticals
were up 6% year over year.
Adjusted earnings per share were up 16%, which excludes a
gain (you've got to love the vagaries
of GAAP) for acquiring partner Medarex, amongst other
things. Bristol-Myers is doing well with its initiatives to
decrease costs before the revenue starts falling. In fact,
the company actually decreased selling, general, and
administrative expenses year over year even though revenue
increased.
Going forward, the drug to watch is diabetes drug Onglyza,
which Bristol-Myers is marketing with
AstraZeneca (NYSE: AZN). It's in the same
class as
Merck 's (NYSE: MRK) blockbuster, Januvia,
but how much of the market it'll be able to take remains to
be seen. As far as I can tell, Onglyza doesn't seem to offer
much of an advantage over Januvia and it has a long ways to
go to reach blockbuster status, having only $20 million in
sales after being launched in August.
Even after the Medarex acquisition, Bristol-Myers has
plenty of cash to make additional acquisitions and still pay
its
massive dividend, which sits above 5%. The acquisitions
won't save the company from inevitable revenue declines when
Plavix's patent expires, but at least investors will get paid
well to see how Bristol-Myers can adapt. So far, so good.
This article was originally published as
I Don't Need No Massive Mergeron
Fool.com
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