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Bristol-Myers Squibb : company profile

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Despite large-scale consolidation in the healthcare industry, Bristol-Myers Squibb has remained for the most part on the sidelines, avoiding transformational mega-deals in favour of smaller bolt-ons, primarily in the biopharma sector. Once the world's #1 drug company, it has steadily been pushed down the rankings by mergers or aggressive growth among its competitors. During the 1990s, it sold off several of its non-core lines, followed in 2001 by its central Clairol business (to Procter & Gamble) as well as half of its medical devices portfolio, in order to concentrate on medicines. Several other non-core units were sold or spun off in 2008 and 2009, most significantly the Mead Johnson nutritionals division. Because of its size, BMS is regarded as a potential takeover target. The group entered tentative merger negotiations in 2007 with Sanofi-Aventis, the developer of its best-selling product, Plavix, which alone accounted for around a third of revenues in 2011. However, no agreement was reached. Plavix lost its patent towards the end of 2012, and several other important patents ended in 2014 and 2015, creating a significant challenge for BMS's future performance.


Click here for agency account assignments for Bristol-Myers Squibb. The company declared total advertising and product promotion expenses of $789m in 2016. In the US, Kantar (in Advertising Age) reported measured expenditure of $487m for 2016. Biggest spending brands were Eliquis (measured spend $298m), Opdivo ($166m) and Orencia ($21m),


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Brands & Activities

BMS launched a new "Productivity Transformation Initiative" strategy in 2007 to transform itself into a dedicated BioPharma company, and has been on the lookout to acquire biologic developers to improve its resources in this field. Its first such purchase was AdNexus Therapeutics, acquired in 2007 for around $430m. In 2008, it launched a $198m offer for Kosan Biosciences, which develops a range of cancer medicines; and also made a bid to acquire the shares in part-subsidiary ImClone that it didn't already own. However, it was trumped in that deal by rival Lilly. Instead, the group snapped up another biologics developer, Medarex, in 2009 for $2.4bn, followed by ZymoGenetics in 2010 for $885m, Amira Pharmaceuticals in 2011, and Inhibitex in 2012 for $2.5bn. Another developer iPierien was acquired in 2014 for up to $550m. All these various acquisitions have been left to operate with partial independence to form what the group describes as a "string-of-pearls" strategy.

BMS's best-selling product for much of the past decade was Plavix, a treatment for angina and other cardiovascular disorders, which accounted for a third or more of group revenues between 2008 and 2011. Originally developed in 1998, it was marketed by BMS in North America, Australia and a few other markets, while co-developer Sanofi had rights in Asia and Europe, where Plavix is marketed as Iscover. Overall, it was the world's #2 best-selling pharmaceutical product in 2011 after Pfizer's Lipitor, with total combined sales of $9.9bn, but sales plunged following expiry of its US patent in May 2012.

The company had already sailed close to disaster during 2006 as a result of a botched attempt to fend off generic competition to Plavix. Despite the fact that the drug's patent was not due to expire for several years, Canadian generic manufacturer Apotex initiated a legal challenge during 2006. In an attempt to fend off that expected lawsuit, BMS negotiated a deal with Apotex to delay the generic version. However, that agreement was subsequently over-ruled by the Department of Justice. As a result, using a legal loophole created by the BMS negotiations, Apotex quickly flooded the market with its own copycat product. A patent court forced Apotex to suspend manufacture of the generic after three weeks, but the damage was already done. Sales of Plavix more than halved in the final quarter of 2006, as wholesalers used up their stockpiles of the Apotex copy.

BMS itself estimated the cost in lost sales of Plavix at between $1.2bn and $1.4bn, and the group's clumsy handling of the situation was widely criticised, not least by partner Sanofi-Aventis. Nevertheless, the two companies won damages of $442m from Apotex in 2012. BMS's revenues from Plavix fell from $3.8bn in 2005 to $3.3bn in 2006, before recovering strongly after 2007. Expiry of the US patent in 2012 left BMS with a considerable hole to fill. Revenues that year plunged by 64% to $2.55bn, and then to just $258m for 2013. The group no longer reports revenues for the product.

Another fruit of the Sanofi alliance was the hypertension treatment marketed in two formulations as Avapro and Avalide. However this too began losing patents in 2011, with BMS's share of sales slumping from over $1bn in 2010 to $231m in 2013. BMS and Sanofi agreed to alter the structure of their relationship from January 2013, with BMS retaining rights for the US and Puerto Rico, but surrendering other markets in return for a royalty structure.

BMS has had a bumpy record with partnerships. Its cancer treatment Erbitux was developed in partnership with ImClone Systems, in which BMS acquired a 20% shareholding in 2001. However ImClone was at the centre of a financial scandal in 2002 as a result of alleged insider trading, and Erbitux's test results were somewhat overshadowed by financial headlines (including the high profile trial and conviction of household guru Martha Stewart in connection with the scandal). Erbitux was finally approved by the FDA in 2004. However BMS only has rights to Erbitux in the US; the product is marketed elsewhere by Merck of Germany. In 2008, BMS launched a bid to acquire the outstanding shares in ImClone for around $4.5bn, in order to take full control of Erbitux and other drugs under development. After several weeks of consideration, ImClone rejected this offer and instead accepted a higher bid from Eli Lilly. BMS continues to work with Lilly on Erbitux and related products in the US, and also banked a healthy $1bn profit in 2009 on the sale of its existing ImClone shares. BMS's share of sales of the drug slipped back to $501m in 2015. Rights expired the following year.

A similar but less troubled relationship with Otsuka Pharmaceuticals of Japan led to the co-development of schizophrenia treatment Abilify. This became BMS's top-selling product for the first time in 2012, contributing sales of $2.83bn. That product was approved for further clinical symptoms in 2007, including severe depression, but the European patent expired in 2014 followed by the US a year later. Sales for 2013 slipped back to $2.29bn, but it remained the group's biggest brand. Since then, though, it has followed a much steeper decline to $746m in 2015. BMS surrendered US rights in 2016. It's still a blockbuster for Otsuka, though sales have declined sharply to around $2.9bn for 2015.

However, these declines have been offset by the growth of newer products. In 2006, the group introduced a new rheumatoid arthritis treatment, Orencia, sales of which have risen strongly in recent years. It joined the blockbuster club for the first time in 2012, and became the group's top-selling product overall in 2015, before being deposed the following year by Eliquis, an anti-coagulant compound which can be used to prevent and treat various forms of thrombosis. BMS shares rights with Pfizer. The drug was approved in 2011 for launch in Europe, and in North America from 2013. First full year sales for 2013 were modest at $146m, but have grown dramatically since then. Sales more than doubled in 2015, and then almost again in 2016 to $3.34bn. A near-50% increase in 2017 took sales to a new high of $4.87bn.

BMS had been one of the global leaders in HIV and AIDS treatments as a result of a portfolio of products including Sustiva and Reyataz. However sales of both have declined sharply from their 2014 highs. Sustiva slipped to $725m in 2017 and Reyataz to $698m. BMS also contributed its expertise to Atripla, a partnership with Gilead Sciences, combining Sustiva with Gilead's Emtriva and Viread products. All revenues from the drug are accounted for by Gilead. At the end of 2015, BMS agreed to sell its portfolio of new HIV drugs in development to GlaxoSmithKline for a total of up to $2.9bn (depending on performance). That arrangement doesn't include drugs already launched.

Another fertile area for development has been hepatitis treatments. Baraclude, a treatment for hepatitis B, remains a blockbuster drug with sales of $1.05bn in 2017. However, several years' research on a new hepatitis C drug was written off in 2012 as a result of poor test results. The group subsequently launched Daklinza. This and other products in its hep C franchise generated combined sales of $1.58bn in 2016, before collapsing in 2017 to just $406m.

Sprycel was launched in 2006 for certain forms of leukaemia. It too became a blockbuster in 2012, with sales topping $2.0bn for 2017. (Otsuka has rights in Japan). New products approved in 2011 included melanoma treatment Yervoy (sales of $1.24bn in 2017) and kidney transplant medicine Nujolix. The biggest launch of 2015 was another oncology drug Opdivo, which generated first year sales of $960m. It has demonstrated dramatic further growth since then, quadrupling to $3.8bn in 2016, then rising to $4.95bn in 2017. However, the publication in August 2016 of disappointing results from clinical trials, caused expectations to be lowered slightly. Though sales have continued to build, the downgrading of future sales estimates caused a sharp slump in BMS's share price, from which it has yet to recover. Another new ocology drug is Empliciti, for myeloma, co-marketed with AbbVie. Sales are small for now, just $150m in 2016.

In 2007, BMS agreed an alliance with AstraZeneca to jointly market two new diabetes treatments discovered by the US company. These products filled a significant hole left by Glucophage, which was BMS's biggest-selling drug in 2001 before its patent expired. The first of these products, Onglyza or Kombiglyze, gained regulatory approval in 2009 and was launched in six key markets in North America and Europe. Sales rose 50% in 2012 to $709m, but gained only a little in 2013 to reach $877m. The second was Forxiga/Farxiga, approved for launch in Europe during 2012 and in the US in 2013. The diabetes alliance was expanded in 2012 to include most of Amylin Pharmaceuticals, acquired by BMS for a total price of $7bn, including debt. Its products include Byetta and Bydureon, already co-marketed in the US by AstraZeneca. BMS generated sales of $400m and $298m respectively in 2013, but at the end of that year, AstraZeneca agreed a deal to buy out BMS's share in the venture for up to $4.1bn. The deal completed in 2014, leading to the transfer of Onglyza, Farxiga, Byetta and Bydureon to AstraZeneca. BMS will continue to derive a royalty stream from future sales.

Several former best-sellers within the portfolio have suffered sharp falls as a result of patent expiry. The most significant of these is Pravachol, a cholesterol lowering agent, for which BMS had US rights. Sales were around $3bn in 2005, but have plunged since then.

All of BMS's non-core businesses had been divested by the end of 2009. BMS sold off its portfolio of adult nutritional supplements, including Boost and Isocal, to Novartis in early 2004 for $385m. A year later, the Swiss company also acquired BMS's small North American portfolio of consumer medicines, including Excedrin, Keri and Comtrex, and rights to market those products in Latin America and Europe. The group sold full control of Excedrin and Bufferin in Asia to Lion Corporation in 2007 - previously the brands had been marketed for many years through a joint venture with Lion. BMS retains its OTC operations in Europe. Local rights to its Latin American products were licensed to Reckitt Benckiser in 2013.

Two smaller but still substantial business units were sold in 2008. Bristol-Myers Squibb Medical Imaging was a worldwide leader in cardiovascular imaging. Its lead product was Cardiolite, a heart-imaging agent with sales of $408m in 2006. However, BMS agreed to sell the entire medical imaging business in 2008 to private equity fund Avista, with a price tag of $525m. Shortly afterwards, Avista also agreed to acquire another BMS subsidiary, ConvaTec, for $4.1bn, in partnership with another private equity fund. ConvaTec is the world leader in ostomy care and modern wound care products, including DuoDERM and new Aquacel dressings.

The last non-core division to be divested was Mead Johnson Nutritionals, a global leader in nutritional products for infants, operating in more than 100 countries. Its Enfamil brand is the world's best-selling infant formula, with sales of almost $1.2bn. Other brands include EnfaGrow toddler snacks and ChoiceDM nutritional products for people with diabetes. Combined sales of the Nutritionals division were $2.9bn in 2008. The group issued an IPO of part of its shareholding in Mead Johnson in early 2009, and spun off its remaining 83% stake to shareholders at the end of the year. The business was acquired in 2017 by Reckitt Benckiser.


After poor performance in 2005 and 2006, BMS began to demonstrate an improvement in 2007 and that upswing continued to gather pace until 2011 when revenues peaked at $21.2bn. However the 2012 expiries of Plavix and Avapro have caused a steady decline. For that year, group revenues fell 17% to $17.62bn, and attributable net income plunged by 47% to $1.96bn. That figure included a $1.83bn impairment charge against a cancelled hepatitis C treatment. There was a further 7% slide in 2013 to $16.39bn, though net income recovered to $2.56bn. Another decline resulted in revenues of $15.88bn for 2014 and net income of $2.0bn.

There has been a steady improvement since then. Revenues recovered to $16.56bn in 2015, rising to $19.43bn in 2016. Net earnings have also rebounded, almost tripling in 2016 alone to $4.51bn. The US accounted for 55% of sales in 2016, Europe for 22% and Japan 7%.

Topline was back over $20bn in 2017 for the first time since 2011, at $20.78bn. However a $3bn tax write-off in the final quarter caused full year net income to plunge by 78% to $975m. On an adjusted basis, excluding exceptionals, operating income was up slightly.


The merger of rival drug companies Bristol-Myers and Squibb in 1989 established the combined group as the world's biggest pharmaceutical group. Until then, the two companies had co-existed, occasionally crossing paths. Edward Robinson Squibb founded his pharmaceutical company in Brooklyn, New York in 1856, manufacturing a range of pure medicines including the early anaesthetics ether and chloroform. But it was a fierce and competitive market. Rival business the Clinton Pharmaceutical Company, also based in New York, was finding the going particularly tough. In 1887, that company was forced to sell part of its holding to two entrepreneurs, William Bristol and John Myers, in order to raise further working capital. Bristol and Myers took a growing interest in their new investment, and changed its name in 1898 to The Bristol-Myers Company.

Meanwhile, Edward Squibb's two sons had taken over the family business in 1895, but seized the opportunity to cash out in 1905 after their father's death. They sold the company to Lowell Palmer and Theodore Weicker. The new owners adopted the company's dedication to pure medicine, making it the cornerstone of the business. In the 1920s the company emphasised this point with a new slogan: "The priceless ingredient in every product is the honor and integrity of its maker". Not exactly catchy, but it said what the company was all about. In 1938, Squibb launched a dedicated research facility, and became one of the biggest manufacturers of penicillin (after Pfizer) in 1944. After the war, the group expanded its operations into Latin America and Europe.

Squibb was acquired in 1952 by chemical manufacturer Mathieson, which was itself bought by Olin Industries a year later. During the late 1960s, the enlarged Olin Mathieson Chemical Company went through a series of restructurings, as the group's industrial divisions were sold off. Finally the whole company adopted the Squibb name in 1971. Later that decade, the group launched pioneering hypertension drug Capoten.

While Squibb focused on pharmaceutical research, Bristol-Myers had chosen early on a more mainstream path. Its first nationally distributed product in the US was a laxative salt, Sal Hepatica, which claimed to reproduce the taste and effect of natural Bohemian mineral water. This was followed by a popular toothpaste, Ipana, which contained an antiseptic to heal bleeding gums. In the 1920s, Bristol-Myers was one of the first drug companies to begin advertising its products, which included shaving creams and pick-me-up tonics, direct to consumers. In 1929, the business went public, and subsequently sold off all of its pharmaceutical operations to concentrate on its non-prescription products.

In 1943, Bristol-Myers got back into the drug business with the purchase of Cheplin Laboratories, and along with other companies, was a key supplier of penicillin at the end of WWII. Post-war, the company diversified, acquiring hair colouring company Clairol in 1959 and infant formula company Mead Johnson in 1967. Zimmer, makers of orthopaedic implants, were added to the portfolio in 1972. Richard Gelb, son of the original owners of Clairol, became CEO that year, and he shifted the company's focus back to pharmaceuticals. In 1978 the group introduced cancer drug Platinol, followed by anxiety treatment BuSpar in 1986. Gelb launched an acquisition spree in the late 1980s, buying biotech developers Oncogen in 1986 and Genetic Systems in 1987. The key deal, however, was the acquisition of Squibb in 1989.

In 1991, the newly merged company won the National Cancer Institute contract to produce Taxol, and introduced cholesterol-lowering drug Pravachol four years later. It also expanded its range with the purchase of professional haircare range Matrix Essentials and French medicine company UPSA. BMS began a process of streamlining in 1992 with the sale of its Drackett subsidiary (makers of household care brands Windex and Drano) to SC Johnson, and acquired US-based Redmond Products, makers of Aussie hair care products in 1997.

In 1999, BMS was tempted to the merger table by Glaxo Wellcome, after the temporary suspension of the latter's merger with SmithKline Beecham. In the end however nothing came of the talks. Later that year, BMS began to dispose of non-pharmaceutical product lines. Skincare brand Sea Breeze was sold to Shiseido that year, followed by Matrix Essentials to L'Oreal. Implant business Zimmer was spun off to shareholders in 2001. After several months of negotiation, BMS agreed in May 2001 to sell the entire Clairol business to Procter & Gamble for a whopping $4.95bn, roughly three times that company's revenues.

BMS announced plans to spend the all-cash sum to ramp up research and development of new drugs to support blockbusters Taxol and Pravachol. Patents on Taxol had in fact already expired in 2000, allowing other companies to develop similar drugs, but BMS managed to postpone introduction of the rival products with a series of court battles. However, in 2001, the courts gave permission for a generic copy of BMS's #5 best-seller, BuSpar. Despite an extensive marketing campaign, another potential blockbuster drug, Vanlev, had to be withdrawn prior to launch in Spring 2000 over safety fears.

BMS signed a co-marketing deal with Novartis to sell new irritable bowel syndrome drug Zelnorm. However plans to launch the latter drug in Europe (as Zelmac) were withdrawn mid-year as a result of differences in interpretation between US and European regulators over clinical tests results. The group added to its portfolio in June 2001 paying $7.8bn to acquire DuPont's pharmaceuticals business, which included HIV treatment Sustiva. However plans to sell its skincare portfolio to specialty pharma company Bioglan for $765m stalled in when questions were raised over how the smaller company would fund this ambitious purchase.

In 2002, BMS acquired a 20% shareholding in biotech developer ImClone. However that investment was hard hit by the financial scandal which subsequently erupted over allegations of insider trading by ImClone's senior management. More problems arose when the group announced possible financial improprieties in previous years. The US Attorney-General and the SEC announced they would investigate allegations that BMS used incentives to encourage two large wholesalers to over-stock drugs, thereby boosting the company's revenues and profits. BMS subsequently restated its financials for the period 1999 to 2001, reducing sales by a total of $2.5bn and earnings by $900m. In 2004 it agreed to settle with the SEC, paying compensation of $150m to be distributed among shareholders.

In 2005, the group agreed to settle the US Attorney-General's criminal investigation for the same offences with a payment of around $300m, on the condition it submit to several years of federal monitoring to prevent further misdemeanour. BMS's former CFO and the head of its drugs unit were subsequently charged with conspiracy and securities fraud, although both denied the charges. However, the company's subsequent mishandling of the generic challenge to its best-selling Plavix was at first considered to be in contravention of proper procedures, and as a result CEO Peter Dolan was asked to resign in September 2006, and replaced by James Cornelius. The federal monitoring restrictions were lifted in June 2007, and BMS agreed to pay a £1m fine in relation to the mishandling of the negotiations over the generic rival to Plavix.

Last full revision 6th October 2016

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