Bristol-Myers Squibb issued relatively upbeat guidance for 2013, but much depends on the performance of Eliquis.
“The ‘main event' for the year is clearly Eliquis sales,” wrote ISI Group's Mark Schoenbaum in an analyst note. “If Eliquis ‘beats,' then the stock should do reasonably well in 2013.”
The clot-buster, which the company co-markets with Pfizer, won approval in December for marketing in the US, Japan and Canada, weeks after getting the green light in Europe. The UK's NICE gave it the thumbs-up yesterday. The drug is expected to benefit from stronger pre-market vetting and messaging as it aims to siphon share from rivals Pradaxa and Xarelto.
BMS forecast worldwide sales of between $16.2 and $17 billion—down from 2012's $17.6 billion (a big drop from 2011's $21.2 billion), but the firm's earnings per share forecast came in considerably better than earlier forecasts for the post-Plavix patent cliff trough, Schoenbaum noted, cautioning that this was due to tax credits and other accounting buoys more than any performance-related surprises.
“My best guess is [that the stock will settle] down a bit once people realize that a lower tax rate ‘bailed' out the EPS line,” he added.
The company sees advertising and promotion spending “increasing in the high single-digit range” for 2013, while marketing, sales and administrative costs will be flat.
“Higher spending is strategically prudent to assure a successful Eliquis launch,” said CreditSuisse's Catherine Arnold in an analyst note.
BMS's adspend dropped 26% in the fourth quarter of 2012 to $212 million. That's in line with Q4 net sales of $4.2 billion worldwide—a decrease of 23% over the year-ago period, reflecting the loss of US patent exclusivity for Avapro/Avalide in March and Plavix in May. Marketing, selling and administrative expenses sank 6% for the quarter, to $1.1 billion, while R&D spend rose 7% to $1.1 billion.