Bristol-Myers Squibb announces major cost-cutting in future strategy
Bristol-Myers Squibb chief executive officer, Peter Dolan, told an investment community meeting this week that the global company was on track to complete its strategic transition at the end of 2006 but that further massive cost-cutting was planned.
Bristol-Myers Squibb chief executive officer, Peter Dolan, told an investment community meeting this week that the global company was on track to complete its strategic transition at the end of 2006 but that further massive cost-cutting was planned.
'We expect to be in a position to achieve a new period of sustainable revenue and earnings growth, starting in 2007 - based on our portfolio of important new marketed products, as well as a productive R&D pipeline. For this to occur, we must first stay focused on investing behind our growth drivers and our pipeline. And, perhaps most importantly, we must drive our current productivity efforts even harder and more systematically across the entire company, in order to have the resources to fund those investments,' he said.
The group cut annual expenses by $200m in 2004 and again in 2005, primarily through realigning its US and European sales forces, by restructuring pharmaceutical development and outsourcing some information technology activities. The company aims to make a further $500m savings in 2007 and an incremental $100m in 2008.
Its focus on reducing expenses is imperative, given the recognition that its oral medicine for the treatment of type 2 diabetes, Pargluva (muraglitazar), will not contribute to near-term revenue and earnings following reports of some adverse side effects. The company is considering the options for Pargluva, including conducting additional clinical studies or terminating development of the product.
In the company's r&d pipeline are: the cancer drugs ixabepilone and ipilimumab (MDX-010); dasatinib, for which a rolling submission of a New Drug Application is expected to be completed within the next month; belatacept a compound for the treatment of solid organ transplant rejection; and the biologic Orencia (abatacept) for rheumatoid arthritis and Emsam (selegiline transdermal system) for Major Depressive Disorder.
The company's main growth drivers are Plavix, the platelet aggregation inhibitor; Abilify (aripiprazole), an antipsychotic agent for the treatment of schizophrenia, acute bipolar mania and Bipolar I Disorder; Baraclude (entecavir), a therapy for hepatitis B; and HIV treatments SUSTIVA (efavirenz) and Reyataz (atazanavir sulfate).