Weathering the Storm - Pharmaceutical Executive


Weathering the Storm
Out from financial scandal, CEO Peter Dolan is steering BMS' most productive pipeline yet.

Pharmaceutical Executive

Both Bristol-Myers and E.R. Squibb & Co. started as family-owned businesses. When the entities merged to form Bristol-Myers Squibb in 1989, it created what was then considered the second-largest pharma company.

Today, BMS is ninth biggest, but industry onlookers don't expect another merger, at least not in the short-term, because there is too much undefined litigation. First off, there are current challenges to the Plavix patent, although it isn't set to expire until 2011. The court is expected to rule on that case sometime between November 2005 and early 2006. If BMS loses the Plavix case, the company will have trouble filling the $2.5 billion revenue hole it will create. However, sources close to the case feel that BMS and partner Sanofi-Aventis stand better than a 50/50 chance.

The second area of undefined litigation surrounds the continual unfolding of the allegations related to the counts of channel stuffing and securities fraud. Frederick Schiff, the former CFO, and Richard Lane, former executive vice president and president of the company's worldwide medicines group, were indicted by federal prosecutors, and a trial date will be set in September. Certainly, whatever type of dirty laundry is aired in court could have ramifications on the company.

In the meantime, Dolan is focused on internal growth—and reclaiming the company's leadership in the industry. "There's much discussion, not inappropriately, about challenges that the company's had from the past. Since we put a strategy in place and said, 'Here's how we're going forward,' we've executed against the strategy, we've delivered against expectations, we've got people in the company aligned behind where we're going, and how we're going to get there. There clearly is a sense of positive movement and momentum."


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