BMS 4Q05 results – Saxagliptin benefits from R&D increase

We learned no real news on BMS and diabetes/obesity in the BMS 4Q05 comments yesterday. Nothing was said about muraglitizar or Saxagliptin in the press release, although on the call, there was sort of a generic statement about how Saxagliptin is one of the late stage products that BMY continues to invest in and is one contributor to the double digit growth in the R&D budget - R&D spending rose 14% in 4Q05, by the way! On muraglitazar, management says they "continue to evaluate their options", but certainly at this point, it seems likely to be shelved: 1) first, of course, it sounds like FDA would require more studies that would take time to generate - a couple of years, minimum - and since the data we've seen on this one hasn't been stunning, it's hard to argue conclusively that the commercial opportunity justifies a major (further) investment. Just, it's far from a home run, especially with Byetta new to the market, and there must be countless competing priorities in terms of R&D resources); 2) the other question is who would help market this to PCPs with MRK having dropped out. We're staying tuned - we look for Merck to make more early stage investments.