BMY Bristol Myers Squibb Co

By Jonathan D. Rockoff and Tess Stynes 

Bristol-Myers Squibb Co. sought to convince investors Thursday that its future was bright despite a major cancer drug setback by unveiling an organizational revamp and $3 billion share buyback while reporting better-than-expected quarterly results.

Shares in the New York-based drug company lost as much as a third of their value after it announced in August that immunotherapy Opdivo failed to meet the main goal of a critical study exploring the drug's first-line use in advanced lung cancer patients.

Investors and analysts feared the surprise setback would give a competing drug from rival Merck & Co. a competitive advantage in the multibillion-dollar immunotherapy market. That drug, Keytruda, was approved Monday for use in first-line lung-cancer patients.

In the third quarter, Opdivo sales rose to $920 million, up from $305 million during the period a year earlier. That was less than what many analysts had expected.

"The trends are good, and we feel optimistic about Opdivo in both the short and long term," Bristol CEO Giovanni Caforio said in a conference call.

Bristol shares rose more than 6% in morning trading on the New York Stock Exchange after the company upped its financial outlook for this year, offered a better-than-expected forecast for next year and outlined its plans to stay atop the lung-cancer immunotherapy market.

Bristol's share repurchases will come on top of $1.1 billion in buybacks remaining under a previous program.

Mr. Caforio said the company's reorganization began earlier this year and will streamline certain operations, such as its supply chain for pills. Bristol didn't provide financial details, except to say that excluding certain items, it expects operating expenses through 2020 to remain at roughly this year's level.

Bristol pioneered cancer immunotherapy, which aims to fight cancer by unshackling the body's immune system. Mr. Caforio said Bristol still has bright prospects treating first-line lung cancer patients by combining Opdivo with its other immunotherapy Yervoy, which is under study.

"This will be a combination market," Mr. Caforio said.

Yervoy sales rose 19% to $285 million world-wide for the third quarter. Revenue from another key Bristol product, the bloodthinner Eliquis, jumped 90% to $884 million globally.

Overall, Bristol-Myers Squibb reported a profit of $1.2 billion, or 72 cents a share, up from $706 million, or 42 cents a share, a year earlier. Revenue increased 21%, to $4.92 billion.

For 2016, the company raised its per-share earnings estimate to $2.80 to $2.90, from its previous estimate for per-share profit of $2.55 to $2.65.

Looking ahead to 2017, Bristol-Myers gave preliminary guidance for per-share earnings of $2.85 and $3.05, while analysts polled by Thomson Reuters expected per-share profit of $2.19.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

October 27, 2016 13:11 ET (17:11 GMT)

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