Bristol Myers Beats 1Q Estimates, VANLEV delayed
By Matt Paolucci

New York-based Bristol Myers-Squibb (BMY) Thursday reported first quarter earnings beating Wall Street estimates by a penny.

The Company said earnings before income taxes increased 14 percent to $1.67 billion from $1.47 billion a year ago. Net earnings increased 15 percent to $1.22 billion compared with $1.06 billion in 1999. The Company benefited from a 0.5 percent reduction in its tax rate due to sales in lower tax jurisdictions. Diluted earnings per share were 61 cents versus 53 cents.

Total sales increased 8 percent (11 percent excluding foreign exchange) to $5.3 billion.

During the quarter, the company repurchased 9.9 million shares of common stock at a cost of $576 million.

Also during the first quarter, the company completed the sale of three pharmaceutical products -- Estrace Cream, Ovcon 35 and Ovcon 50 for a pre-tax gain of $120 million. The company also recorded a provision for restructuring of $120 million before taxes during the quarter.

Highlights in the quarter included a 128 percent increase in sales of its cardiovascular drug PLAVIX ($201 million), a 74 percent increase in its hypertension drug AVAPRO ($87 million) and a 51 percent boost in sales of type 2 diabetes drug GLUCOPHAGE ($426 million). AVAPRO and PLAVIX are cardiovascular products that were launched from joint venture between Bristol-Myers Squibb and Sanofi S.A.

Other notables for the first quarter included sales of BUSPAR (anti-anxiety, +24 percent), SERZONE (anti-depressant, +38 percent), and PARAPLATIN (anti-cancer agent, +7 percent). Its ZERIT and VIDEX (anti-retroviral) products were unchanged versus last year.

However, capturing headlines was yesterday's news of BMY's withdrawal of its current new drug application for VANLEV, a treatment for hypertension (high blood pressure). In Wednesday's announcement, questions by the FDA were raised regarding the comparative incidence and severity of a condition called angioedema. Angioedema is the localized swelling of the face, throat, lips and tongue triggered by food.

VANLEV is considered the most clinically developed drug for regulating blood pressure. In clinical studies, VANLEV has been able to inhibit two key enzymes, the angiotensin- converting enzyme (ACE) and neutral endopeptidase (NEP), essential in controlling both the systolic and diastolic elements of blood pressure.

Regarding VANLEV, analyst Alex Zisson of brokerage firm Chase Hambrecht and Quist stated, "...in this category of drugs, there is no one even close."

The FDA had been reviewing VANLEV since December and was expected to approve it by June.

The drug has been studied in nearly 7,000 patients, with some staying on the drug up to two years, Bristol-Myers said.

Zisson told CNBC yesterday that Bristol Myers said it would refile the VANLEV drug application with additional safety data in 2001, pushing back any possible approval for at least 12 months.

Shares of Bristol Myers lost more than 23 percent, or $30 billion in market capitalization, after Wednesday's announcement. Now trading at $50, down from $65, some experts feel the steep drop in BMY's share price was overdone, given Bristol's pledge to refile VANLEV's application after additional safety tests are conducted.