By Michael Erman
NEW YORK (Reuters) – Strong growth from Bristol-Myers Squibb Co’s Opdivo and Yervoy cancer immunotherapies drove the company’s first-quarter results past analysts’ expectations and relieved some anxiety about increasing competition for the drugs.
Bristol-Myers, which is facing pressure from activist investors after losing ground to rival Merck & Co’s cancer treatment Keytruda, mostly reversed an earlier cut to its 2017 profit outlook. Its shares rose nearly 4 percent.
“Sales for Opdivo were strong despite a more competitive landscape,” Chief Executive Officer Giovanni Caforio said on a conference call with analysts. “In the U.S., while we have seen some share loss in lung cancer, our share has shown signs of stabilization.”
Sales of Opdivo and Yervoy, which boost the cancer-fighting abilities of a patient’s immune system, jumped 60 percent and 25 percent, respectively, in the quarter. Sales of blood thinner Eliquis, another important Bristol-Myers drug, gained 50 percent.
“We have a favorable view of Bristol’s solid position in the immuno-oncology market,” said Edward Jones analyst Ashtyn Evans.
Opdivo sales beat expectations by 14 percent and should be “a key growth driver for the company,” Evans added.
OPDIVO VS. KEYTRUDA
Bristol-Myers warned in January that the potential for earlier-than-expected lung cancer competition from Keytruda could sap Opdivo’s earnings potential this year.
Merck filed for speedy U.S. approval of Keytruda as an initial lung cancer treatment in combination with chemotherapy. Around the same time, Bristol-Myers said it would not seek accelerated approval for a combination of Opdivo and Yervoy in first-line lung cancer and has not fully explained why.
Still, Opdivo outperformed scaled-back sales expectations for the quarter, and the company now sees “the potential” for U.S. sales of the drug to grow in 2017.
Activist investor Jana Partners began building a position in the company last year. While Jana has been quiet about its intentions, Bristol-Myers added three independent directors to its board after consulting with the investor.
Billionaire investor Carl Icahn has also taken a stake in the company, hoping it will be sold, according to the Wall Street Journal.
Excluding one-time items, Bristol-Myers’ earnings of 84 cents a share exceeded the analysts’ average estimate of 74 cents, according to Thomson Reuters I/B/E/S. Revenue also exceeded Wall Street expectations.
Bristol-Myers increased its 2017 earnings forecast to a range of $2.85 to $3 a share.
(Reporting by Michael Erman; Editing by Bill Rigby and Lisa Von Ahn)