Bristol Myers Squibb

Bristol Myers Squibb was formed in 1887 when McL aren Bristol and John Ripley Myers bought the Clinton pharmaceutical Company in Clinton young York. In 1900 Bristol-Myers broke through into the black it has remained there of whole(a) time since. In 1924, gross dough summit meetingped $1 virtuoso thousand thousand for the initial time in Bristol-Myers history. The spirited societys crossways were then s grizzly in 26 countries. At this point, the shares held by John Myerss heirs became useable for sale, triggering a series of moves that in 1929 turned Bristol-Myers into a publicly held gild, listed on the New York Stock Ex diversify.The postwar depression prompted Bristol-Myers to jettison its pharmaceutical business and set ab come in up itself entirely to its specialties Sal Hepatica and Ipana, its two big winners, and a dozen or so assorted toiletries, antiseptics and cough syrups. By the remainder of the war, it was clear that penicillin and opposite antibiotics re presented an immense opportunity for Bristol-Myers. In 1921 the Squibb Company coined its slogan The invaluable ingredient in e very product is the watch exclusively over and integrity of its manuf playuring business, which is now the integrated slogan of Bristol Myers Squibb.In 1989 Bristol-Myers merged with Squibb, creating a global drawing card in the health care industry. The merger created what was then the orbits second-largest pharmaceutical enterprise. BMS is now ranked 8 in the pharma sector. trustworthy Drugs, Issues and Interests The Company operates in three segments Pharmaceuticals, Nutritionals and Other Healthcare. The Pharmaceuticals segment is made up of the global pharmaceutical and international consumer medicines business. The Nutritionals segment consists of Mead Johnson Nutritionals (Mead Johnson), primarily an infant principle and childrens nutritional business.The Other Healthcare segment consists of ConvaTec, Medical Imaging and Consumer Medicines (U nited States and Canada) businesses. In 1991, the go with received U. S. Food and Drug Administration (FDA) approval in the U. S. for Videx (didanosine) in like manner known as ddI, making it the second medicine open for treating human immunodeficiency virus infection (the other being AZT). Other approvals that year include an antibiotic, Cefzil (cefprozil) two cardiovascular agents, Pravachol (pravastatin sodium) Tablets and Monopril (fosinopril sodium) Tablets and a central nervous placement drug, Stadol NS (butorphanol tartrate) C-IV.In that same year, the companies signed a Cooperative Research and Development treaty with the National Cancer Institute to research and develop a clean compound for treating certain types of cancer. This compound, TAXOL (paclitaxel) Injection, immediately was established as the attach tos exculpate research priority. Bristol-Myers Squibb invested hundreds of millions of dollars to supply TAXOL in sufficient quantities for clinical trials, t o position data for regulatory submission and to develop alternative sources of TAXOL (which originally was derived from the m forbiddenh of an endangered guide, the Pacific Yew).TAXOL launched in 1993 and quickly became one of the worlds most widely used cancer discussions. For a few eld BMS held the exclusive rights to harvest the bark of the endangered yew trees on US soil, the trees bark is used in making TAXOL. By the end of 1995, the beau monde had over 60 product lines with $50 million or more(prenominal) in yearbook sales worldwide. At the beginning of 1998, the FDA grant clearance to market Excedrin Migraine for the relief of migraine pointache distressingness and associated symptoms. Excedrin Migraine became the first migraine headache medication available to consumers with forth(p) a prescription.In 1999, Bristol-Myers Squibb denote SECURE THE FUTURE, a $100 million payload to advance human immunodeficiency virus/ back up research and community outreach ki nds in pentad gray African countries southerly Africa, Botswana, Namibia, Lesotho and Swaziland. And in 2000, Bristol-Myers Squibb, together with four other pharmaceutical companies and international agencies, joined the UN aid Drug ACCESS Initiative. The ACCESS program aims to form antiretroviral medicines and therapies to treat opportunistic infections more widely available in African countries that defend developed a coherent national AIDS schema.As part of the program, the lodge sullenered to lower the prices of HIV/AIDS medicines in those countries by 90 percent. More recently, Bristol-Myers Squibb took its access efforts a step further, offering HIV/AIDS drugs below greet in Africa and committing an admissional $15 million for extending SECURE THE FUTURE to four Western African countries Burkina Faso, Cote dIvoire, Mali and Senegal. The company is also ensuring that its patents do not pr stock-stillt inexpensive HIV/AIDS therapy in Africa.The patent for Zerit, right s to which are owned by Yale University and Bristol-Myers Squibb, is now available at no comprise to treat AIDS in southern Africa. However, paying backs like losing patents like this and a few more in South Africa has caused many problems for drug companies and BMS is not immune to them. In September 2000, Bristol-Myers Squibb announced a new strategy that includes a sharpened focus on medicines and an aggressive external development program. As part of this new strategy, the company announced its intention to divest its Clairol and Zimmer businesses.The company announced in June 2001 that it had entered into a definitive agreement to acquire the DuPont Pharmaceuticals Company for $7. 8 zillion an acquisition intended to further strengthen Bristol-Myers Squibbs medicines business. With the DuPont acquisition, Bristol-Myers Squibb added Sustiva (efavirenz) Capsules to its HIV portfolio and also gained products such as Coumadin (war utmostin sodium tablets, USP) Crystalline, the U . S. leading prescribed anti-coagulant and Cardiolite (Kit for the formulation of Technetium Tc99m Sestamibi for Injection), a medical imaging agent.In November 2002, the FDA approved Abilify (aripiprazole) for the discussion of schizophrenia. In 2003, the company aggrouped up with cancer survivor and Tour de France champion lance Arm concentrated to sponsor the Bristol-Myers Squibb TOUR OF HOPE, an unprecedented week-long coast-to-coast cycling event. En route, the 26- section team of cancer survivors, caregivers, physicians, nurses and researchers supercharged awareness of cancer research and the importance of clinical trials in underdeveloped new treatments.Reyataz (atazanavir sulfate), the first protease inhibitor for the treatment of HIV/AIDS with once-a-day dosing, was introduced in the U. S. in July 2003 and approved for marketing in europium in March 2004. On March 29, 2005, the FDA approved Baraclude (entecavir). Baraclude, discovered by Bristol-Myers Squibb scientis ts, is indicated for the treatment of chronic hepatitis B infection. Bristol-Myers Squibb announced the FDA approval of Orencia (abatacept) for the treatment of rheumatic arthritis on December 23, 2005. Orencia is the first in a new class of medications for this disease.On February 28, 2006, Bristol-Myers Squibb and Somerset Pharmaceuticals announced FDA approval of EMSAM (selegiline trasdermal system), the first transdermal patch for the treatment of major depressive disorder. SPRYCEL (dasatinib), discovered by Bristol-Myers Squibb scientists, was approved by the FDA on June 28, 2006, for the treatment of chronic myeloid leukemia. Bristol-Myers Squibb and Gilead Sciences announced the FDA approval of ATRIPLA (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg) on July 12, 2006. ATRIPLA is the first-ever once-daily single tablet regimen for HIV.As a strategy they are focusing on ten diseases, these are come uponive (psychiatric) disorders, Alzheimers/deme ntia, atherosclerosis/thrombosis, diabetes, hepatitis, HIV/AIDS, obesity, oncology, rheumatoid arthritis and related diseases, and solid organ transplant. circulating(prenominal) Financials The current financial information of the company from MSN Central is as below. The revenues fall in not been plus in spite of all the successful products that retain been launched and that is an area for change. The company needs to improve its revenues and cave in a confident(p) trend in profits too.The profits are nigh 16%, however, that researchs pale when compared to GSK and Merck both in the 20- 22% range (Fortune 500 list). In fact at 15%, the company is ranked 10 out of 12 in the pharma sector and the revenues are 8 out of 12. That for a company that is going to be 120 years in 2007 is poor. As discussed in the current drugs, issues and interests section, the company is focusing on around keystone diseases and getting some fantastic drugs in the market. However, all this is som eways not improving the revenue. In fact in the last 5 years, revenue has grown at less than 2% year on year.On the current price ($24), the share gives a 6% return on investment (EPS is $1. 43). Currently, they are benefiting from the effects of letting go of their CEO shaft Dolan and the company is touted as a coinover target. Their major problem is the loser to prevent Apotex from manufacturing Plavix. Although BMS tried to stop Apotex by getting into a steal that would give Apotex $40 million for not manufacturing the drug, the US State lawyer Generals however didnt let the deal go through and kind of the company got into an investigation because of the whole mess that the deal created.From the BMS perspective, they were doing the right function Plavix generates revenues of $5. 9 Billion. $3. 8 Billion are BMS and the rest is Sanofi-Aventis. $3. 8Billion is almost 20% of BMSs revenue and Plavix gives approximately 40% of the profits in their US business. All this has a big impact on the dividend given by the company and most analysts hand suggested that the dividend payout give recreate on to be cut by almost 30-40 cents it was $1. 12 the previous year.BMS has a favourable line up of drugs that are in the pipeline and would be a good takeover for any pharma company that has strong cash flow but weak pipeline. These are rumors but sounding at the current scenario, it is a good possibility. The interim CEO crowd together Cornelius headed Guidant and functioned its sell-off. Vision, Mission and Goals The current vision mission and goals of BMS are referred as a engagement. The pledges are to divers(prenominal) stakeholders and are as follows The BMS Pledge Our companys mission is to extend and enhance human life by providing the highest-quality pharmaceutical and related health care products.We pledge to our patients and customers, to our employees and partners, to our shareholders and neighbors, and to the world we serve to act on our belie f that the priceless ingredient of either product is the honor and integrity of its maker. To Customers We pledge excellence in everyaffair we make and market, providing the safest, most effectual and highest-quality medicines and health care products. We promise to continually improve our products through innovation, energetic research and development, and an unyielding commitment to be the very outflank. To ShareholdersWe pledge our loyalty to responsibly increasing the shareholder prise of your company based upon move growth, strong finances, productive collaborations and innovation in research and development. To Communities We pledge scrupulous citizenship, a helping hand for worth era causes and constructive action that supports a clean and healthy environment. We pledge Bristol-Myers Squibb to the highest standard of moral and ethical air and to policies and practices that fully embody the responsibility, integrity and decency required of free enterprise if it is to sexual morality and maintain the confidence of our society.The new era for BMS essential get a line that the pledge to the shareholders is held more firmly than it has been in the last few years. The company moldiness improve revenues and margins. The dead(prenominal) revenues and profits are a cause for disturb in the longer run. All pharma companies are fighting against lowlyer companies that want to make generics and Pfizer itself has been fighting for the patent of Lipitor, the worlds best selling drug with $12. 9 Billion in revenues. BMS needs to tick off that the scandals that have been hitting it in the last 5 years never happen again and the company needs to have a high(prenominal) standard of disposal.Shareholder encourage erodes very quickly for many reasons, but off the last 3-5 years, embodied brass section has been a major issue. Companies with tens of billions of dollars of revenue have disappeared and timewornholders have suddenly seen their investment dis appear with them. BMS has serious bodied governance issues. The company was hit by financial scandals when it was caught pushing inventories and showing them as sales. They have a court appointed superintendent because of showing higher revenues and now with the Plavix issue they are in an even larger mess as far as collective governance goes.Apart from that, concord to IMS health, a pharmaceutical information and consulting company, sales of prescription medicines worldwide arise 7% to $602 billion,. The United States still accounts for the lions share of that, with $252 billion in annual sales, but sales in it and the other nine biggest markets grew by still 5. 7%. But emerging markets such as China, Russia, South Korea and Mexico outpaced those markets, growing a whopping 81%. However, when we look at the overall learn 10 -20 years from now we see that the population of the developed world is going to fall and there allow for be more and more quite a little who provide be retired.This also means there will be more medicines required. I do not see myself expiry at the age of 70 in the year 2040 medical technology will be so advanced in the next 30 years that it will probably keep me alive till I reach 80 or 90. This is great news for the pharma companies. However, the top dog beckons that the battalion who can afford expensive medicines for diseases that BMS is targeting are only in the developed countries where the growth has stagnated or is less than 10%. The growth is in the growing world, but the diseases that BMS is targeting are all that need lots of medicines and very expensive medicines.Taxol for example, is used for cancer patients. The medicine is now made by other companies too, and yet the prices for Taxol in the developing world are genuinely high and population find it hard to afford Taxol. In my opinion, BMS has to supervise 2 issues First is Corporate Governance and the second is to crack the developing markets and affix m arket share in those countries, this will automatically increase its stagnant revenues and breathe some life into its ailing business. The markets are stagnant in the developed world.New Vision Statement I am making a few changes to the current pledges that BMS has to customers and shareholders. The changes reflect what the company needs to do in order to transform itself. To Customers We pledge excellence in everything we make and market, providing the safest, most effective, and represent effective and highest-quality medicines and health care products. We promise to continually improve our products through innovation, diligent research and development, and an unyielding commitment to be the very best. To ShareholdersWe pledge our dedication to responsibly increasing the shareholder value of your company based upon continued growth, strong finances, productive collaborations and innovation in research and development. We pledge to be extremely careful in all governance issues and not succumb to the pressures of the market. We pledge to conduct our business with utmost(prenominal) fairness. Key interchange Issues Lack of Corporate Governance is something that no company will admit, but that is the major problem facing BMS right now. Having an overseer is a bad indicator. The key change issues that we will face while changing the attitude towards corporal governance are1. The first issue is to change the behavior of bosses who force employees to act in ways that will be against any corporeal governance policy. 2. The second change will be to create an atmosphere where an employee can raise an integrity or corporate governance concern. This is critical right now as it seems that over the last few years many things were not raised. 3. The thirdly change will be in terms of managing the markets and expectations of all stakeholders, ultimately it is the expectations of the markets or other stakeholders that push the employees to cover up things or show a bri ght picture when there is none.It is important to manage the expectations. The next key change after corporate governance is to ensure that we can clutch the growing markets. To capture the new markets, we will have to make a couple of changes in the way we do business. These changes are likely to be as follows 1. Lower the cost of drugs most of the money goes into research. The drugs that conquer markets cost hundreds of millions of dollars to make. So the cost of developing drugs has to be lowered, once this cost is lowered, the cost of the drug per se can also be lowered accordingly.2. mystify with products that cater to the growing segments there it is likely that the hatful in the developing countries will be using medicines that are generic. For a branded product to conquer that market, the companies have to give an added value to their product. This susceptibility mean, reworking some of the old compounds and coming up with extra strong versions or other versions that w ould cross off the medicines BMS could come up with a line of medication aimed at women with premenstrual syndrome or aimed at people over 70.This might be the radiation diagram medicines, but with a diametric potency or properties so that they would be better suited to a several(predicate) age group. 3. Newer gene types this might mean that there will be opportunities as people from different races might have different problems or might need different treatments. It is possible that the genes or body types in different races might suffice differently to different molecules and thus would require modifications to the current molecules. Depending on the cost of doing this modification, BMS can decide to modify certain molecules to better suit different races.How will these areas be changed? What are the broad sets of proposals for change? The Critical Change requirement is Corporate Governance. Corporate Governance is something that every company duologue and boasts about bu t as we can see in campaign of BMS, this has dieed grossly. The company actively needs to change the situation within its departments and particularly in the higher ranks to improve the Corporate Governance scenario and educate people about the problems that are caused because of bad governance.Before I dwell into how to combat corporate governance, I would like to talk about why officials higher up in the ranks and even some in the lower ranks resort to hide information that might be damaging to the company. The first reason is to ensure that their jobs are secure. If a mortal masks information it is because they feel that the particular slice of information will be damaging to their job, their department or their interest. This is the elemental take and it is very psycheistic. However, it is this same thing that drives even the bigger corporate information scandals.The second reason for concealing information or reporting wrong figures is to ensure that the company meet s its goals. To take an example from an IT company, it is one thing to not report a data theft because it might compromise the jobs of the IT security personnel, but quite another not to report the bugs that might exist in the new software that a company is making. various projects have different timelines and it is critical for companies to meet those timelines as revenues and profits are based on the sales of that new product.If we take windows Vista for example, view has been delayed numerous times and because of that many partners of Microsoft are suffering, especially Intel. Microsoft has in public announced about the delays however a smaller company might choose to not mention a delay in their quarterly update. For the officials in the company it is something that protects the shareholders and other partners from the value perspective, but what they fail to see is the long term damage that their actions are causing.Concealing information like a shot will have its repercussi ons in the next two quarters and ultimately if someone finds out the true picture, the agate line market will stamp out the script and the valuation will suffer enormously. However, a public announcement about the delay will cause temporary drop in the stock valuation (till the product is back on track or launched in the market) but on a personal level, it will affect the persons bonus (for sure) and the growth prospects of the higher ranks who were trustworthy for not delivering the results.The cost of unveil the truth means jobs and immediate losses in the stock markets. many an(prenominal) of the higher ranking officials have stock options and this makes it even more compensable from a personal perspective to ensure that the company is shown in good light and seen as an entity that meets its goals and beats the market predictions. The corporate governance scenario gets worsened because of the stock options but it can be some(prenominal) better if every one looked at the picture from a long term perspective. In the longer term, the company will deliver the products and make the profits.What every individual must realize is that a company will survive beyond every employee and every leader. One employee or a leader cannot make the company, there is always a team. However, a leader can considerably break the company and corporate governance is one way of doing it with much ease. Coming to ways on how BMS can change the corporate governance culture within the organization I would recommend the following 3 changes 1. Top down pressure to conceal information 2. Protective climate for babble out blowers 3. Managing the expectations of the stock market and other stakeholdersTop down pressure to conceal information Driving the first one seems to be the toughest one, but this is where the table members have to set the rules and deal facts with an iron hand. All directors and Country Heads must be responsible towards Corporate Governance and the Finance pe ople especially should run their reports through the get on with. The board must appoint an independent third party evaluator and attendee to ensure that the reports being presented are straighten out and any discrepancy must be dealt by terminating the boorish head and seizing all stock options that the person may have.Termination with seizure of stock options at all levels will mean that the lure of a high stock price will not be a propel factor in concealing information and we can expect people to take a long term view of the situation quite of a short term view based on when their stock options might be due. With a personal lure of money gone, the top management would be forced to look at share value in the longer term and hence wont be pushing their direct reports to fudge information.In addition to this, I recommend that one board member be assigned the task of being an auditor and also the point of contact for all kind of tip-offs or corporate governance blab blowers. This will give the employees all over the company more faith in the system. The biggest problem for whistle blowers or people who have issues with corporate governance is that they fear for their jobs and they fear that if they still have their jobs, they will be treated will disgust in the office for going against what might be termed as normal practice in that division.The presence of a board member as a person who can look into corporate governance issues ensures that people can raise concerns in confidence without the fear or being outcastes at their jobs. This board member of course needs to have a team of people who will investigate the issues that are raised. At the middle management level or at the level where people head departments at country levels, the country head must tighten the leash and implement all corporate policies.The country heads must have audits from outside parties to ensure the genuineness of the financial statements and the systems within the company. At the lower management levels the managers should be responsible for their business. However the ultimate responsibility would be with the middle management. The board member however, should be contactable by everyone within the organization. The organization change call for is to re-align the stipend packages of the people who have stock options.This would entail the compensation and benefits team to look at the packages again and set up a new corporate policy about rewarding and retaining employees. The major change is only for the fastness management to ensure that they dont abuse their power to increase the value of their shares. The stock option change will also green goddess out the people who do not have a hunger for working with BMS. It is very important for a company to ensure that their top management is a group of people who take the company shut to their heart, and of course these people are there for the long term.Protective climate for whistle blowers The next issu e we need to cover is about protecting the whistle blowers. The appointment of a board member to look after the corporate governance issues should quell any fears that a person might have about corporate governance. In addition to this, a very small step that might go a long way is to bring up issues with a pseudo identity, where people can write in and give information without being obligated to divulge their identity even to the board member.The whistle blowers biggest fear is that their job and career gets jeopardized if it is found out that they were the ones who raised concerns that brought down the whole unit and the jobs of several people. People take it against them and they are outcaste. I also recommend that these people have help from outside sources such as counseling etc that may be needed as they grapple with the effects of being whistle blowers or as they continue to live without talking to anyone about being the whistle blowers.In addition to this, the company should actually owe these people an incentive for doing the company a favor by helping it exposing thing internally and managing the fall out and taking corrective actions. Such revelations by outsiders can be far more damaging and bring the company into disrepute apart from all the lawsuits and the hassles of the law. The board is always responsible for ensuring that things are going on smoothly within the company and ultimate beneficiary of having an internal system that exposes the corporate governance problems within the company actually helps the board save the company and their own reputations.