Bristol-Myers Squibb's 1st-qtr sales and profits down, as takeover talk continues

Even though first-quarter 2007 turnover and earnings at US drug major Bristol-Myers Squibb were lower year-on-year, the results still beat analysts consensus expectations. However, despite the company confirming interim chief executive James Cornelius to the permanent post, takeover speculation continues, with French drug major Sanofi-Aventis still viewed as a front-runner, despite reports that earlier talks have broken down (Marketletters passim). This is particularly so because Mr Cornelius oversaw a bidding war for Guidant, which went to Boston Scientific. Shares of Bristol-Myers dropped 1.6% to close at $29.23 on April 26.

B-MS has had its share of troubles, with the devastation of fourth-quarter sales of its lead product, the blood thinner Plavix (clopidogrel), which it co-markets for partner Sanofi-Aventis, as a result of a flood of generic copies into the wholesale market by Apotek, which went ahead with the move pending a patent dispute resolution and leading to the sacking of CEO Peter Dolan. The company swung to a loss of $134.0 million that quarter (Marketletter February 5). It was also involved in an accounting scandal but, by June, the firm will complete its two-year probation period to avoid federal criminal charges.

For the quarter, the company reported a 3.4% decline in net earnings, which were $690.0 million, or $0.35 per diluted share, under generally-accepted accounting principles. This included a first-quarter pretax gain of $200.0 million on the disposal of its assets on the psoriasis drug Dovonex (calcipotriene).