NEW YORK — Bristol-Myers Squibb Co.'s exit from the diabetes business, plus higher taxes and research spending, combined to slash the drugmaker's second-quarter profit by 38 percent, but the company handily beat Wall Street's muted profit expectations.
The maker of arthritis medicine Orencia and schizophrenia drug Abilify also lowered its profit forecast for 2014 by 20 cents, to a range of $1.50 to $1.60, saying it expects more restructuring charges and asset writedowns.
The New York-based drugmaker said Thursday that net income was $333 million, or 20 cents per share, down from $536 million, or 32 cents per share, a year earlier.
Excluding one-time items totaling $465 million, or 28 cents per share, net income would have been $798 million, or 48 cents per share. Analysts surveyed by FactSet were expecting 44 cents per share.
Total revenue dipped 4 percent, to $3.89 billion, just over the $3.86 billion analysts had expected.
Bristol-Myers is continuing a long-term transformation from producing pills for the masses to creating complex, expensive drugs for cancer and rare disorders. It's been investing significantly in the hot new field called immuno-oncology, or drugs that take a brake off the immune system so it can better recognize and attack cancer cells, and will soon seek U.S. approval for a melanoma drug in that new category called Opdivo.
Opdivo was approved for treating inoperable melanoma, a deadly skin cancer, on July 4 in Japan — the first time any country has approved a drug in the promising new class, called PD-1 checkpoint inhibitors.
Bristol said Thursday that it's just signed a collaboration deal with Japan's Ono Pharmaceutical Co. Ltd. to share costs of testing Opdivo alone or in combination with Bristol's groundbreaking skin cancer drug, Yervoy, for treating multiple cancer types. Those include brain, head and neck, kidney and lung cancers. Ono has rights to sell Opdivo in Japan, South Korea and Taiwan; Bristol-Myers has the rights elsewhere.
It's awaiting U.S. approval of a pair of hepatitis C drugs just approved in Japan, Daklinza and Sunvepra. They offer patients with the liver-destroying virus a much higher and faster chance of a cure than the long-time standard treatment — without the repeated injections and the nasty, flulike side effects that causes.
Meanwhile, as part of the business makeover, Bristol-Myers sold its half of its diabetes drug business to partner AstraZeneca PLC early this year and now receives just a small royalty — $27 million in the second quarter, compared to the $438 million it got from the partnership a year ago. Bristol-Myers noted that excluding the lost diabetes income, worldwide revenue was up by 7 percent.
In the quarter, combined sales of the company's three cancer drugs — Yervoy, Sprycel and Erbitux — jumped by 22 percent to $875 million, and Orencia sales jumped 14 percent to $402 million.
And after a slow start, the clot-preventing drug Bristol-Myers sells with partner Pfizer Inc., Eliquis, finally saw sales surge, to $171 million from $12 million a year ago. Bristol records all the sales and splits the profit with Pfizer.
On the down side, sales of top seller Abilify dipped 1 percent to $555 million, as Bristol-Myers lost marketing rights in Europe to a partner, and increased competition cut sales of HIV drugs Reyataz and Sustiva by more than 10 percent each.
In morning trading, Bristol-Myers shares were up 24 cents at $49.56, about the midpoint of their 52-week range.