|
|
|
Bristol Myers Squibb
(NYSE: BMY)
345 Park Avenue New York, NY 10154
212-546-4000,
fax 212-546-4020
www.bms.com
Chairman, CEO:
Charles Heimbold Jr.
Revenues (nine months ending Sept. 30): $15.8 billion
Earnings (nine months ending
Sept. 30): $3.548 billion
Market Capitalization: $126 billion (Jan. 11, 2001)
Employees: 54,500
|
Business New Haven
1/22/2001
By: Mitchell Young
|
Bristol Myers Squibb
First, do no harm.
Investors who sidestepped the Internet and biotech super stories suffered their own great depression for much of 1999 and the first part of 2000. The pharma buzz was all biotech, anticipated government restrictions on drug companies, generic drugs, and expiring patents. Overlooked by many investors were enormous and stable cash flows, mergers and of course investments in biotech through partnerships.
By year's end, however, the “drugs” had finally kicked in and those lethargic symptoms were replaced by a feeling of well being for those that chose a traditional technology sector: pharmaceuticals.
Bristol Myers Squibb (NYSE: BMY) investors squirmed in their seats for 1999 as the stock entered and exited the year with almost no change at $62 and a fraction. In 2000 the picture looked different with a gain of about 17 percent. Unfortunately, a falling market and the Federal Reserve's rate cut, which some assumed meant a potential return to tech gains, placed new pressure on BMY shares, which lost nearly all its 2000 gain in the first two weeks of 2001.
Third-quarter sales increased ten percent (excluding businesses already sold in 2000 and foreign exchange) to $5.3 Billion in the Third Quarter (ending September 30). U.S. pharmaceutical sales wereup 18% for the quarter, worldwide pharmaceutical sales increase 12% for the Quarter (14% excluding foreign exchange ). Diluted earnings per share increased 15% to $.62 .
During the nine months, the company recorded a $562 million pre-tax gain primarily on divestitures. The company also recorded a pre-tax charge of $542 million for restructuring.
For the nine months, net earnings increased 14% to $3,548 million compared to $3,115 million in 1999. Earnings per share increased 15% to $1.77 from $1.54.
BMY's research center in Wallingford (the Richard L. Gelb Center for Pharmaceutical Research & Development, named for the company's chairman emeritus), is one of four research centers of the company's “Pharmaceutical Research Institute,” which includes facilities in Princeton, Hopewell and New Brunswick N.J.
BMY is developing an extensive set of collaborations with leading biotech firms including Incyte Pharmaceuticals, Genome Therapeutics Corp., Acacia Biosciences, Affymetrix and Millennium Pharmaceutical.
BMY has a wide range of highly successful drugs focused on major diseases, including successes in battling AIDS.
The company's Taxol drug is one of the leading cancer therapies, with more than $417 million of sales in the third quarter alone. Pravachol a popular cholesterol-lowering treatment, saw its sales increase 16 percent in the third quarter, to $446 million. And Glocphage, an oral medication for the treatment of diabetes, surged ahead 25 percent to $435 million.
In September, company CEO Charles Heimbold Jr. announced a growth plan promising a doubling of sales, earnings and earning per share over the next five years. The company acknowledges that the plan will be seen as aggressive. However, it mirrors a similar plan whose goals the company did achieve between 1994 and 2000.
To achieve the plan the company will focus on its core pharmaceutical business and will divest its nearly $2 billion Clairol division and Zimmer orthopaedic medical-devices business. Heimbold indicated he expects an increase in partnerships and co-promotions as well as acquisitions and an expansion of the company's presence in Japan.
The company expects that Plavix, an anti-thrombotic agent, will approach the $1 billion mark in sales by year's end, and that sales of it will grow to $3 billion by 2005.
In September BMY directors approved a $2 billion increase for the company's Common Stock Repurchase Program, raising its capacity to $12 billion. In the past four years the company repurchased approximately 144 million shares of its common stock, leaving nearly two billion outstanding. In the previous nine months the company repurchased 29 million shares of common stock at a cost of $1.6 billion.
Analysts remain divided on both the company and the sector. Nearly all the major pharmacuetical companies are selling at around a still-healthy 28 to 30 times earnings.
Bristol's Taxol, Glucophage and Buspar - all growing, high-revenue drugs - will all face generic competition before long. HMOs remain on the warpath over the costs of prescription drugs, as the percentage of health-care expenses continues to rise in favor of the pharmaceutical industry.
A more drug company-friendly administration in Washington was expected to help pharma stocks. Share prices have dropped, however, since the election results were finalized, perhaps because any Medicare reform still likely to take place in some form would be tough on the industry.
What to believe: a doubling of revenues or profits over the next five years, or a health care paradigm shift? Ask the experts.
On January 4 Bear Stearns downgraded BMY stock, while on January 5 Morgan Stanley upgraded it. Go figure.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
