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Bristol-Myers Faces Antitrust Probe

The drug maker says its patent settlement with a generic rival is under scrutiny. It also posts a 33% decline in earnings.

July 28, 2006|From the Associated Press

Bristol-Myers Squibb Co. is the subject of a criminal antitrust probe over a patent settlement with a generic competitor, the drug maker said Thursday. It also reported that its second-quarter profit fell 33% on higher taxes and product investments.

New York-based Bristol-Myers Squibb said it learned Wednesday that the Justice Department had launched the investigation into the settlement, which was designed to keep Apotex Inc.'s generic version of blood thinner Plavix at bay until at least 2011.

In May, the company and its marketing partner Sanofi-Aventis were hit with several lawsuits alleging that the settlement violated antitrust laws by denying the public access to a cheaper generic alternative.

Shares of Bristol-Myers Squibb dropped $1.95, or 7.5%, to $24.04 on Thursday. U.S. shares of Sanofi-Aventis fell $2.84, or 5.7%, to $47.16.

Bristol-Myers Squibb said second-quarter net income declined to $667 million, or 34 cents a share, from $1 billion, or 50 cents, a year earlier. Excluding discontinued operations, the company reported earnings of $991 million, or 50 cents a share, a year earlier.

Analysts surveyed by Thomson Financial had estimated earnings of 32 cents a share in the latest quarter.

Bristol-Myers Squibb attributed the decline to a significantly lower tax rate in 2005 and a one-time benefit from tax adjustments from repatriated profit. Also, research and development expenses rose 14% to $740 million from a year earlier.

Revenue slipped less than 1% to $4.87 billion from $4.89 billion last year. Analysts expected revenue of $4.76 billion.

Sales of Plavix rose 18% to $1.15 billion, but sales of the cholesterol drug Pravachol, which lost patent protection recently, fell 48% to $323 million from a year earlier.

The company reiterated its full-year earnings outlook of $1.15 to $1.25 a share, compared with a consensus of $1.19 by analysts.

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