Company news: BMS, GSK and J&J
Bristol Myers Squibb's second-quarter results show the drugmaker reeling from the effects of the Plavix and other patent losses. The company saw sales dive 18%, to $4.4 billion, for the period ended June 30, compared to $5.4 billion for the same period the year before. Among the major drops were a 60% free-fall in sales of the Plavix blood thinner, to $741 million compared to $1.9 billion for the same period the year before (Plavix went generic in May). It also saw sales of its blood pressure medicine Avapro fall 53% to $117 million for the period ended June 30, compared with $251 million for the same period last year. Like Plavix, Avapro went generic two months ago. CEO Lamberto Andreotti said in a statement that the fall-off is not a surprise. “We've been preparing for the expected loss of exclusivity of Plavix and Avapro/Avalide for a number of years,” he said. Leerink Swann Analyst Seamus Fernandez called the quarter a mixed one in a research note on Wednesday, noting that the drugmaker's performance “was generally weaker vs our expectations.”
GlaxoSmithKline's second-quarter results point to a continued emphasis on cost-cutting. “For the remainder of this year, we will continue to look to maximize growth opportunities...and take further action to reduce our cost base,” CEO Andrew Witty said in a statement. Sales for the quarter ended June 30 fell 2%, to $10.3 billion, compared to the same period last year, with particular weakness in the US (where sales fell 8%, to $3 billion compared to the same period last year), and in Europe, where sales slid 7%, to $2.8 billion, compared to the same period last year. The company blamed some of the losses on pricing pressures and a flood of generics. Among the contributing losses: Valtrex sales fell 24% to $102 million for the quarter, compared to the same period last year, “principally as a result of generic competition in the US and Europe,” according to a company statement, along with diabetes drug Avandia, which saw sales plummet 85%, to $4.6 million, compared with the same period last year. However, the company said its efforts to slim down and become more efficient have started to pay off, and highlighted its falling SG&A costs for the quarter (down 4%) as well as its move to consolidate its European and Emerging Markets businesses under Abbas Hussain. Jefferies analyst Jeffrey Holford called the dips “well flagged weaknesses,” in his July 25 research note, but expressed confidence in GSK's ability to adapt and find its footing.
Johnson & Johnson is making a pitch for new creative. As first reported in Ad Age, J&J wants to "consolidate creative for its massive advertising account," with the review following Michael Sneed's January appointment as VP corporate affairs, and the company's April replacement of CEO William Weldon with Alex Gorsky. The publication also notes that consolidation means a host of agencies, including DDB, BBDO, JWT and Havas, may soon have to trim the J&J name from their client lists.