For the third quarter, Bristol-Myers booked earnings of $0.44 per share, excluding certain charges, down from $0.47 per share in last year's third quarter. The top line was essentially flat at $5.4 billion. Patent losses were chiefly to blame, but increased competition from other branded drugs also took a toll. Notably, the company elected to pump up research and development, as expenses in this area climbed 9% to $615 million.
The company's financial results tell one story, but its research efforts suggest Bristol-Myers is setting the stage for a comeback. The company has several promising medicines in its pipeline, including some in late-stage trials. Abatacept, a compound for the treatment of rheumatoid arthritis, and Muraglitazar, a medicine Bristol-Myers is developing with Merck
An area of concern is litigation challenging patents on Plavix, a medicine that prevents blood clots. Sales of the drug have been a lifesaver for Bristol-Myers in the midst of other problems. The company's continued turnaround, then, hinges to some extent on Plavix's fate. In any case, the firm expects that even in a worst-case scenario, Plavix won't have generic competition before the second quarter of 2005.
For now, it looks like only time will tell whether Bristol-Myers can find its way out of its doldrums. The case of Elan
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.