BMY Bristol Myers Squibb Co

By Anne Steele 

Bristol-Myers Squibb Co. slashed its guidance for the year as the drugmaker contends with dimmed prospects for its top cancer drug after major setbacks during the final quarter of the 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, treatment that aims to fight cancer by harnessing the body's immune system, but it has been losing ground to competitors in recent months, including Merck & Co.'s Keytruda.

After Bristol announced in August that its immunotherapy Opdivo failed to meet the main goal of a critical study exploring the drug's first-line use in advanced lung cancer patients, the company sought to convince investors it still had bright prospects treating first-line lung cancer patients by combining Opdivo with its other immunotherapy Yervoy, which 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 fears the company is losing ground in the race for this all-important patient group.

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.

Also last week, Merck agreed to pay $625 million plus royalties on Keytruda sales to Bristol and Ono Pharmaceutical Co. to settle a suit alleging the cancer drug violates their patent for immunotherapy.

Bristol and Ono filed suit in federal court in Delaware in 2014, the same day that Merck received U.S. Food and Drug Administration approval to market Keytruda as a treatment for the deadly skin cancer melanoma.

Bristol and Ono, who discovered and developed the PD-1 antibody Opdivo, had asserted in litigation that Merck's sale of Keytruda infringed the companies' patents relating to the use of PD-1 antibodies to treat cancer in the U.S., Europe, Australia and Japan.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

January 26, 2017 07:15 ET (12:15 GMT)

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