Bristol-Myers Squibb (NYSE:BMY) posted lower revenues in the fourth quarter of 2012 on Plavix patent expiry. Revenues declined 23% year-over-year to $4.2 billion. However, earnings rose on tax benefits of $411 million attributable to a capital loss deduction. Earnings were $0.56 per share in the fourth quarter, up from $0.50 per share in the year-ago period. 
For full year 2012, revenues and earnings of the company declined significantly due to patent expiry of Avapro in March 2012 and of Plavix in May 2012. Revenues declined 17% y-o-y to $17.6 billion and earnings declined 46% y-o-y to $1.16 per share in 2012.  However, the outlook of the company is stable due to presence of several fast-growing drugs like Yervoy, Orencia, Sprycel and Onglyza in its portfolio. Additionally, recent regulatory approvals for Eliquis and Forxiga will add to sales and earnings growth of the company in coming months.
Plavix patent expiry
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Plavix – the blockbuster cardiovascular drug of Bristol-Myers constituted nearly a third of its total revenues in 2011. Sales of the drug fell sharply and significantly after patent expiry due to competition from cheaper generics. In the fourth quarter, sales of Plavix declined 97% y-o-y to $49 million from $1.7 billion in the year-ago period. For full year 2012, sales of Plavix declined 64% y-o-y to $2.5 billion from $7.1 billion in 2011. 
The sales of Avapro, another cardiovascular drug also declined 57% y-o-y in the fourth quarter due to competition from generics. For full year 2012, sales of Avapro declined 47% y-o-y to $503 million. 
Ongoing growth in sales of Yervoy, Onglyza, Orencia and Sprycel
The decline in sales of Plavix and Avapro was partially offset by growth in sales of several other drugs driven by rising adoption. In the fourth quarter, sales of Yervoy (an anti-cancer drug) increased 47% y-o-y to $211 million, of Onglyza (an anti-diabetic drug) increased 29% y-o-y to $198 million, of Orencia (drug for treatment of rheumatoid arthritis) increased 26% y-o-y to $325 million, of Sprycel (an anti-cancer drug) increased 24% y-o-y to $281 million and of Baraclude (drug for treatment of Hepatitis B) increased 13% y-o-y to $360 million. Excluding Plavix and Avapro, the sales of all other drugs combined increased 13% y-o-y in the fourth quarter. 
Eliquis and Forxiga regulatory approvals to add growth in 2013
Additionally, in the fourth quarter Bristol-Myers received regulatory approval for Eliquis for preventing heart attacks in patients with an irregular heart beat not caused by a heart valve, which is called non-valvular atrial fibrillation (NVAF). The company received NVAF approval for Eliquis in European Union (EU) in November, in the U.S., Japan and Canada in December and in South Korea in January. Eliquis on the strength of its positive clinical trials is expected to become a major drug in the NVAF treatment market and is central to Bristol-Myers’ strategy of offsetting the loss in sales from Plavix patent expiry.
Bristol-Myers also received EU regulatory approval for Forxiga for treatment of type 2 diabetes in the fourth quarter. The drug belongs to an upcoming class of anti-diabetic drugs called SGLT2, and it will help the company address the growing multi-billion dollar type 2 diabetes treatment market in the EU.
These important regulatory approvals of the fourth quarter will add to sales and earnings growth of Bristol-Myers in 2013 and beyond. The company currently forecasts sales in the range of $16.2 billion and $17 billion and earnings in the range of $1.54 and $1.64 per share for 2013. 
We currently have a stock price estimate of $33.59 for Bristol-Myers, approximately 10% below its current market price. We are in the process of incorporating fourth quarter earnings of the company and will update our estimates shortly.Notes: