Ixempra is already approved for sale in the U.S., but European officials rejected the drug, concerned that its small added survival benefit didn't make up for the damage it causes to nerve cells.
While the EU's verdict is disappointing, I doubt it will cost Bristol-Myers too much. After all, the drug had only $25 million in sales last quarter, in a crowded market that includes Abraxis Bioscience's
Still, you can't blame Brisol-Myers for trying to get the drug to Europe. Once the company's spent money on clinical trials, any new sales of the drug will likely result in a boost to earnings, since drugs fetch such high gross margins. That's particularly true of cancer drugs, which can be supported with a smaller sales force than a drug like Pfizer's
Bristol-Myers has been pretty beaten-down lately, but it might be able to get back on track if it can bring drugs slightly more successful than Ixempra to market. In the meantime, at least investors have a fat dividend check to cash while they wait for the stock price to rise again.