Bristol-Myers Drug a Letdown in Trials

Researchers on Wednesday unveiled disappointing results for a make-or-break Bristol-Myers Squibb Co. drug, sending its shares plunging to a four-year low and leading analysts to suggest the drug giant could become a takeover target.

New York-based Bristol-Myers hoped the drug, designed to treat congestive heart failure and high blood pressure, would become its next blockbuster.

But data from the heart-failure trial showed the drug, Vanlev, was not superior to an inexpensive generic already on the market, and results of the hypertension trial failed to alleviate safety concerns that had hobbled the drug’s progress in an earlier trial.

“Vanlev represented the most important opportunity for Bristol-Myers to grow at or above a competitive pace,” said Richard Evans, an analyst at Sanford Bernstein. “There are only two things now that will make Bristol-Myers grow: One is a major new product, which we don’t have, and two is a merger.”

Without Vanlev, which analysts had predicted could generate peak sales of $3 billion, Bristol-Myers is left with a handful of less lucrative drugs that won’t reach the market until at least 2004.

In the meantime, Bristol-Myers’ sales and earnings are slowing: It expects earnings to drop by 10% to 15% in the first quarter.

Bristol-Myers’ shares fell 15.6% to $41.08 on the New York Stock Exchange, wiping out more than $14 billion in market capitalization. The blow is the latest in a series of reversals for the firm, still reeling from a setback to cancer drug Erbitux, which it is developing with ImClone Systems Inc.

Vanlev’s disappointing results puts additional pressure on Bristol-Myers’ chief executive, Peter Dolan, who has been accused of paying too much for Erbitux rights and overpaying in the $7.8-billion purchase of DuPont’s drug unit.

Still, Bristol-Myers does not plan to give up on Vanlev, for which it sought U.S. regulatory approval to treat hypertension in December.

Though researchers said results of the heart-failure trial showed the drug only to be as effective as the generic, they said it may reduce future heart attacks or stroke in heart-failure patients by 10% to 20%. They said Bristol-Myers plans to launch new trials to prove it.

In 2000, the company withdrew Vanlev’s application to the U.S. Food and Drug Administration after the agency expressed concern about angioedema. The latest study tested 25,000 hypertension patients in one of the biggest clinical trials ever.

Vanlev proved more effective than the generic drug enalapril in treating high blood pressure, the researchers said. The higher incidence in Vanlev-treated patients of a side-effect known as angioedema, a potentially life-threatening reaction that causes swelling of the face, neck, lips and throat, was minor in comparison to the drug’s potential to save lives, they said.

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Bristol Bombs

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