Weathering the Storm

Out from financial scandal, CEO Peter Dolan is steering BMS' most productive pipeline yet.
Aug 01, 2005

Nestled among the skyscrapers in midtown Manhattan is the headquarters of Bristol-Myers Squibb. If you enter at Lexington Avenue—away from the austere grand entrance—you'll meet Ralph, an elderly security guard who has stood watch there since Peter Dolan joined BMS in 1988.

Steering Strategy (left) Elliott Sigal, MD, president of Bristol-Myers Squibb's Pharmaceutical Research Institute, and Andrew Bodnar, MD, senior vice president, strategy and medical and external affairs, have helped CEO Peter Dolan craft a winning strategy based on risk/benefit for the company and its brands.
"That Mr. Dolan, he's a nice man," says Ralph. "He always says 'good morning,' no matter what kind of rush he's in."

The fact that Dolan has managed to smile and extend pleasantries, even in the midst of a media hailstorm, is a testament to his good nature—but probably even more so to his endurance. After all, just days before Dolan met with Pharm Exec for an interview, BMS struck an agreement with the US Department of Justice (DOJ) to settle criminal charges related to the allegation that, by giving wholesalers incentives to stockpile drugs, it had inflated revenues by billions of dollars. The DOJ agreed to defer prosecution. BMS agreed, among other things, to pay $300 million, bringing the total penalties associated with the incident to $839 million—and closing a nearly three-year investigation.

Top-Down Leadership
And that's just one of the headaches Dolan has faced since he became BMS' CEO and chairman in 2001. There was the much-hyped blood pressure drug Vanlev (omapatrilat) that never materialized. And the disappointing performance of Erbitux (cetuximab). Not to mention the wave after wave of patent expirations on key products, such as Taxol (paclitaxel) and Glucophage (metformin).

Dolan maintains his post as CEO, but he hasn't walked through these issues unscathed. As part of the agreement with federal prosecutors, Dolan has turned over his title of chairman to long-time board member James D. Robinson III. He also has what Deutsche Bank's pharmaceutical analyst Barbara Ryan calls "a full-time cadre of baby-sitters" to ensure the company stays on the straight and narrow.

Philanthropy Flashpoint
But Dolan has managed to keep the enterprise running, and in the process, help harvest BMS' most productive run in R&D yet. The company received FDA approvals for four drugs in two and a half years and has two drugs currently awaiting FDA approval.

"Until 2007, BMS will lose between $1 to $1.5 billion a year," says Dolan. "But 2007 to 2011 looks like a potentially attractive period for the company."

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