International and Cancer Drug Sales Spur Bristol-Myers Squibb's Q4 Results

Pharmaceutical giant Bristol-Myers Squibb (NYSE: BMY  ) reported its fourth-quarter earnings results before the opening bell this morning, and based on its results (and the early reaction of investors before the overall market turned south) everything seems to be on track.

For the quarter, Bristol-Myers Squibb delivered a 6% increase in revenue to $4.44 billion as adjusted EPS increased 9% to $0.51, topping Wall Street's estimates by $0.08, despite a 300-basis-point decline in gross margin to 71.3% and with the help of a 7% reduction in marketing, selling, and administrative expenses to $1.1 billion.

If there were three major stories this quarter it would be international sales, cancer sales, and business divestment.

The first growth driver was Bristol-Myers' international sales, which increased 11% compared to the meager 1% revenue gain witnessed domestically. Of particular help were Bristol-Myers' type 2 diabetes medications, Byetta and Onglyza, which saw international sales jump 1,650% and 34%, respectively.

Secondly, Bristol-Myers' focus on specialized care drugs is beginning to pay off, especially with regard to oncology revenue growth. Worldwide sales of leukemia drug Sprycel rose 30% (and 44% in the U.S.), while Yervoy sales improved 23%. Recently approved blood-thinning drug Eliquis also powered higher with $71 million in sales compared to just $1 million in the year-ago period.

Countering this strong growth was a 22% decrease in schizophrenia and bipolar disorder drug Abilify, which also happens to be Bristol's best-selling drug at the moment.

Finally, Bristol-Myers' quarter was defined by renewed operational focus. The company announced during the quarter that it would be selling its portion of its diabetes franchise to AstraZeneca (NYSE: AZN  ) for $2.7 billion in upfront cash, and could earn an additional $1.4 billion in milestone payments. The approval by the Food and Drug Administration of type 2 diabetes medication Farxiga in the U.S. already earned Bristol $600 million of that $1.4 billion. Bristol-Myers' management notes the sale will be accretive to earnings upfront but may weigh on earnings toward the end of the decade.

Looking ahead, Bristol-Myers reaffirmed its previously issued guidance which calls for adjusted EPS of $1.65 to $1.80 for fiscal 2014.

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