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Bristol-Myers Squibb plans restructuring

Date published: 14/12/2005

Pharmaceutical company Bristol-Myers Squibb (BMS) has told investors that it will make a series of cost-cutting measures to help fill the gap left by lost patent protection.

The company said that it had made savings of $200 million between 2004 and 2005. Cuts due for next year should help the firm recover $500 million by 2007. BMS plans to find another $100 million in the next few years.

Bristol Myers Squibb will lose patent protection on cholesterol drug Pravachol next year, opening the door for a host of generic versions. Reuters reported that the company believes its earnings will fall by 18 per cent next year.

Peter R. Dolan, CEO of BMS, said: "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."

The company said that the cost cutting also came out of recognition that its type 2 diabetes drug Pargluva would not contribute to revenues.

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