In his note, Anderson said that as the industry loses exclusivity on several leading drugs, opening the market to more generic drugs, Bristol-Myers Squibb could face losses around 2012.
"BMY could ultimately be a take-out candidate, based on our belief that there may be at least some merger and acquisition activity in the pharmaceutical sector as the patent "cliff" of 2011/2012 draws closer," analyst Tim Anderson said.
It looks like Bristol-Myers is certainly going through a restructuring, as far a strategy is concerned, mostly reacting to the shifting market place and an increase in international players. As part of the biopharma focus, Bristol has made some big divestitures. In May it sold the ConvaTec wound therapeutics and ostomy care business to Nordic Capital and Avista Capital Partners LP for $4.1 billion. BSM's medical imaging unit was sold for $525 million in January to Avista. Also, BSM is selling a small stake in its Mead Johnson division, maker of infant formula Enfamil and other products.
The cash from the sale Bristol raises will go toward a series of small and midsize licensing deals and acquisitions, what they call their "string of pearls" strategy; the moves are being led in part by new CFO Jean-Marc Huet, who takes over from Andrew Bonfield. The Deal's Cheryl Meyer reports the BMS restructuring program, announced in December, will cost the company between $900 million and $1.1 billion on a pretax basis.
This restructuring includes:
- reducing the number of brands in the company's mature products portfolio by 60% between 2007 and 2011;
- reducing the number of manufacturing facilities by more than 50%t by the end of 2010; and
- reducing total headcount by approximately 10% between 2007 and 2010.
However, the cutbacks are not keeping Bristol-Myers from strategically expanding. The company also recently announced the $190 million acquisition of Kosan Biosciences Inc., a cancer therapeutics company. In addition, this quarter the company came out on top, with net sales of $5.2 billion for the first quarter of 2008, which is a 20% increase over 2007, according to a company statement.
So if Bristol-Myers is for sale, who would the potential suitors be? Chances are any of the Big Pharma companies such as Pfizer Inc. or GlaxoSmithKline plc might take an interest. - Maria Woehr
Could Bristol-Myers Squibb Co. be entertaining a sale in the future? Sanford C. Bernstein & Co. LLC analyst Tim Anderson might answer "good chance" based on a note he recently wrote, according to a Reuters article. 
