BMY Bristol Myers Squibb Co

By Anne Steele and Jonathan D. Rockoff 

Bristol-Myers Squibb Co. cut its earnings guidance for the year as the drugmaker contends with dimmed prospects for its top cancer drug after major setbacks last year.

For 2017, the company now expects adjusted earnings of $2.70 to $2.90 a share, down from its previous guidance of $2.85 to $3.05.

Bristol pioneered cancer immunotherapy, a type of treatment that aims to fight cancer by harnessing the body's immune system, but it has been struggling in recent months to cope with competition from Merck & Co.'s Keytruda and most recently Tecentriq from Roche Holding AG.

After Bristol announced in August that its immunotherapy Opdivo failed to meet the main goal of a critical study exploring the drug's use in advanced lung cancer patients who hadn't previously been treated, the company sought to persuade investors it still had bright prospects treating such patients, known as "first-line" lung cancer patients, by combining Opdivo with Bristol's other immunotherapy, Yervoy. The combination is under study.

But last week, Bristol said it won't pursue speedy U.S. regulatory approval to market that combination as a first-line treatment for lung cancer. That announcement fed investor fears the company is losing ground in the race for this all-important patient group.

In a conference call Thursday, Bristol said it was adjusting its sales strategy for lung-cancer patients. Executives said they expect Opdivo sales to grow overseas but to be flat in the U.S., where Bristol will concentrate on serving lung-cancer patients who have already received treatment until its trials studying combinations of therapies for untreated patients finish.

"We do believe we have a meaningful role to play in lung cancer in the future," Bristol CEO Giovanni Caforio said on the conference call.

Mr. Caforio also pointed to Bristol's pipeline of new kinds of immunotherapies in development. "I remain confident in our significant long-term opportunity in immuno-oncology," Mr. Caforio said.

During the fourth quarter, Opdivo sales rose to $1.3 billion, up from $475 million during the period a year earlier. Yervoy sales edged 0.4% lower to $264 million world-wide. Revenue from another key Bristol product, the blood thinner Eliquis, jumped 57% to $948 million globally.

In all for the December period, Bristol-Myers Squibb posted earnings of $894 million, or 53 cents a share, compared with a loss of $197 million, or 12 cents a share, a year earlier. The 2015 results included after-tax charges of 24 cents a share from the Five Prime Therapeutics Inc. and Cardioxyl Pharmaceuticals Inc. business development transactions and 8 cents a share for the transfer of the Erbitux business in North America to Eli Lilly & Co.

Excluding certain items, adjusted earnings rose to 63 cents a share from 38 cents. Revenue surged 22%, to $5.24 billion.

Analysts polled by Thomson Reuters had predicted earnings of 67 cents a share on $5.13 billion in revenue.

In the previous quarter, Bristol said it had begun a reorganization to streamline certain operations, such as its supply chain for pills. The company provided no update on the reorganization in Thursday's report.

Write to Anne Steele at Anne.Steele@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

January 26, 2017 13:25 ET (18:25 GMT)

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