Bristol-Myers Squibb Co. reported Wednesday that first-quarter net income rose nearly 22% on strong sales and a gain on the sale of a business.
Also on Wednesday, Bristol-Myers said it would receive up to $375 million from Merck & Co. as the two agreed to jointly develop and market muraglitazar, a diabetes drug. Bristol-Myers will receive a $100-million upfront payment and an additional $275 million as certain milestones are met.
The drug maker said it earned $964 million, or 49 cents a share, for the quarter ended March 31, compared with $792 million, or 41 cents, in the same period last year.
After items including a one-time gain of $295 million from the sale of its Mead Johnson Adult Nutritional Business, Bristol-Myers earned 41 cents a share in the latest quarter. That beat by 2 cents the average forecast of analysts surveyed by Thomson First Call.
Sales rose 9.6% to $5.18 billion from $4.73 billion a year earlier.
On the New York Stock Exchange, Bristol-Myers Squibb shares rose 76 cents to $25.48.
Several key products boosted sales. Revenue from blood-clot reduction agent Plavix grew 71% to $697 million while sales of cholesterol-lowering medicine Pravachol rose 9% to $671 million.
Revenue for AIDS drug Reyataz, which was launched in July, was $75 million. Meanwhile, sales of antipsychotic medicine Abilify more than tripled to $115 million.
Also, Erbitux, a cancer drug launched in February, posted sales of $17 million. Bristol-Myers markets Erbitux with ImClone Systems Inc.
The earnings news was overshadowed by the announcement of the deal with Merck, which drew mixed reaction from analysts.
Muraglitazar was considered one of the stars of Bristol-Myers' pipeline.
It is one of a new, experimental class of drugs known as dual PPAR agonists, which work by targeting cell receptors that can control both the blood sugar and lipids of patients with diabetes.
Under the deal, the two companies will share future development and commercialization costs.
Merck will receive payments based on sales, but Bristol-Myers Chief Financial Officer Andrew Bonfield said the companies would not divide the revenue evenly. He didn't disclose details.