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Last week Amgen announced that it was reorganizing its R&D structure and that layoffs were likely. Today, the company announced that it had hired Tony Hooper, very recently the former senior vice president, Commercial Operations, and president, U.S., Japan and Intercontinental at Bristol Myers Squibb (BMS) to overhaul commercial operations. Shortly after the Hooper announcement almost 400 Amgen employees learned that they would lose their jobs.

Hooper will replace Jim Daly as executive vice president of commercial operations at Amgen. During his 16 year tenure at BMS, Hooper ran commercial operations for all of BMS’ products in both mature and emerging markets.

Amgen is reorganizing its R&D efforts because its EPO franchise revenues are declining and it is preparing to launch its recently approved osteoporosis drug called Prolia. According to a post on today’s Pharmalot blog the R&D overhaul is not an across the board reduction but will affect multiple sites. At present, Amgen employs about 17,600 workers worldwide.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

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Bloomberg news today reported that Bayer AG’s Chief Executive Officer Marijn Dekkers said that he would consider a “merger of equals” to bolster the company’s sagging healthcare division. The division, a minor revenue source for Bayer AG, posted $25.1 billion in sales last year.

While Dekkers did not name the companies that he considers to be Bayer’s “equals”, convention wisdom suggests the list is likely to include Eli Lilly & Co, Bristol Myers Squibb (BMS) and Amgen, one of the last remaining, large, independent biotechnology companies. Lilly and BMS both  had  sales revenue similar to Bayer's last year whereas Amgen had lower sales of $15.1 billion. 

The reasons for a potential merger are not entirely clear. However, Bayer Healthcare is waiting to hear about regulatory approval of its new anticoagulant Xarelto medicine for irregular heartbeat patients who face the risk of a stroke. Analysts predict that Xarelto may exceed $2.5 billion in global sales. Approval of Xarelto will change Bayer’s valuation and consequently, don’t expect merger talks to begin until after FDA renders its decision on the drug.

Meanwhile, Bayer’s top-selling multiple sclerosis (MS) treatment betaseron faces competition from a similar Novartis drug called Extavia, and from its new oral MS medication Gilenya. Sales of betaseron fell 5 percent in the first quarter. Moreover, sales of Bayer’s birth-control pill Yaz dropped 18 percent after Teva Pharmaceutical Industries Ltd. introduced a generic version of the medicine.

Lilly, BMS and Amgen all face significant challenges in the future and both BMS and Amgen have been repeatedly mentioned as takeover targets. However, from a historical perspective mergers of mediocre or struggling companies rarely yield stronger, more financially robust ones! But, what do I know, I am just a scientist!

Stayed tuned for more updates.

Until next time...

Good Luck and Good Job Hunting!!!!!!!

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The pharmaceutical industry, not unlike all big business during the disastrous Bush Administration, was virtually unregulated. Bush and his cronies managed to accomplish this feat by destabilizing the US Food and Drug Administration (FDA) and essentially hamstringing any regulatory authority that it had. Not surprisingly, many pharmaceutical companies saw an opportunity to increase their bottom lines by engaging in off label marketing of many of their approved drugs—a practice clearly forbidden by the agency. 

Despite the fact that off label marketing is illegal, many big pharma companies knowingly and willfully engaged in the practice. Luckily, the Obama administration has reinvigorated and restored the regulatory powers at the agency and FDA is now aggressively investigating and punishing companies that had promoted off-label use of their products over the last decade.

The New York Times today reported that Novartis joins a growing list of pharmaceutical companies that have settled government investigations into health care fraud in the last few years, including Pfizer, which paid $2.3 billion; Eli Lilly, $1.4 billion; Allergan, $600 million; AstraZeneca, $520 million; Bristol-Myers Squibb, $515 million; and Forest Laboratories, $313 million. Pfizer, Lilly, Allergan and Forest pleaded guilty to crimes in the cases. The company was fined $422 million settle criminal and civil investigations into the marketing of the antiseizure medicine Trileptal and five other drugs. 

According to the article, the five other drugs involved in the civil settlement are Diovan, a hypertension drug that is the company’s top-selling product, at $6 billion last year; Sandostatin, a drug to treat a growth hormone disorder that had worldwide sales of $1.2 billion last year; Exforge, a hypertension drug that sold $671 million; Tekturna, a blood pressure medicine that sold $290 million; and Zelnorm, a medicine for irritable bowel syndrome and constipation that was later withdrawn from the United States market.

It is important to make a distinction between the practices of off-label drug use and off label marketing. As many of you may know, licensed US physicians are allowed to prescribe any FDA-approved drugs if they believe that their use will benefit patients. This is off-label drug use. However, in contrast, it is illegal for companies to actively promote or market approved drugs for therapeutic indications for which they have not received regulatory approval. This is off-label marketing and a strategy that has been used by companies to increase sales of approved products without having to spend money on expensive clinical trials that are required to prove safety and efficacy for a new drug to gain regulatory approval. While this may be a backdoor strategy for companies to boost product sales, it clearly puts patients at risk because the actual safety and efficacy for the indications has not been adequately tested and proven.

Many drug makers have been critical of FDA’s increase scrutiny of drug safety and have argued that it has negatively impacted the regulatory approval rates of new experimental medicines. While this may be troubling to many pharmaceutical executives, the FDA was created to insure that all approved drugs are safe and effective and the risk to Americans who use them is minimal. In other words, the agency is simply doing its job—something it was prevented from doing for the past eight years!

Until next time,

Good Luck and Good Job Hunting!!!!

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Several months ago, I posted an article that suggested that layoffs in the pharmaceutical industry were beginning to slow. Apparently executives at Bristol Myers Squibb (BMS) didn’t read my blog post (I believe that they have in the past) and today announced that the company will eliminate 840 jobs or 3 per cent of its 28,000 member workforce.

The company says the jobs will be eliminated over the next six months, and the cuts could be spread across all its businesses and geographic locations. A BMS spokesperson indicated that company executives are still reviewing the entire organization to determine which jobs will be eliminated. The new round of layoffs is intended to further streamline the company. Interestingly, BMS purchased Seattle-based Zymogenetics for $885 million two weeks ago.

These cuts coupled with small biotechnology company acquisitions and a recent stock buyback initiative suggests that the company may be positioning itself for sale or merger. BMS’ top selling drug Plavix which represents almost 40 percent of the company’s revenue stream will lose patent protection in 2011.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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The Boston Globe reported today that this morning Henri Termeer, the embattled CEO of Cambridge, MA based Genzyme acknowledged for the first time that company was indeed up for sale. However, he was quick to point out that the $69 per share or $18.8 billion takeover bid from Sanofi Aventis was insufficient.

Over the past few days, Sanofi Aventis’ CEO Christopher A. Viehbacher turned up the heat on Termeer; forcing him to possibly take Sanofi’s latest offer directly to Genzyme shareholders. While Termeer acknowledged that the company was for sale, he hinted that other companies may join the bidding war to get the $75 per share price that the Genzyme board is seeking. 

The Sanofi Aventis-Genzyme situation is beginning to resemble the Bristol Myers Squibb (BMS)-ImClone standoff of two years ago. As you may recall, Jim Cornelius—BMS CEO at the time—publicly and repeatedly offered a “low-ball” price ($62 per share) to purchase ImClone despite admonishments from Carl Icahn, ImClone’s Chairman. As negotiations stalled, Icahn told Cornelius that there were other suitors who were willing to pay a higher price to acquire ImClone. Surprisingly, rather than continuing to negotiate in good faith, Cornelius decided to call Icahn’s “bluff.” In less than a week, Eli Lilly purchased ImClone for $70 per share ($6.5 billion); the price that Ichan had previously and publicly asked for to purchase the company.

Many of you already know that Icahn holds a substantial minority Genzyme stock position and is represented by two current Genzyme board members. That said, if I were Sanofi’s Viehbacher, I would proceed with extreme caution in future negotiations. Like him or not, Icahn is a financial genius and second-to-none negotiating M&A deals. 

Maybe Viehbacher ought to contact Cornelius for advice? Oh yeah...Cornelius retired as CEO earlier this year but he is still Chairman of the BMS Board of Directors. Maybe it is worth a call?

Stay tuned for new developments as the saga continues.

Until next time...

Good Luck and Good Job Hunting!!!!!

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The expanding European financial crisis is forcing drug makers to continue to explore ways in which to cut costs. Faced with budget deficits amid a global economic crisis, European countries such as Germany, France and Greece have cut or plan to cut their health-care spending. Greece last month ordered drugmakers, including France’s largest drug maker Sanofi-Aventis, to cut prices by 3 percent to 27 percent to help rescue its economy. 

Not surprisingly, Sanofi Aventis responded by announcing new job cuts and more stringent cost control measures. Yesterday, Sanofi’s Chief Financial Officer announced at an analyst meeting in Los Angeles that “We are restructuring. We are changing our marketing model. We are merging sales forces, we are reducing sales forces, having a multiproduct sales force. We will continue to do that.” Most of the job cuts and cost saving measures will come at the expense of sales and marketing personnel. The size of pharmaceutical R&D and sales and marketing workforces have been devastated over the past three years with over 200,000 employees losing their jobs.

Sanofi-Aventis Chief Executive Officer Chris Viehbacher, who joined the company in 2008, shut or sold plants and canceled the least promising research projects in a bid to trim 2 billion euros ($2.46 billion) in costs. These actions, coupled with the most recent restructuring efforts were enacted to ensure 2013 earnings are at least equal to 2008 profit. Like most other big pharma companies, Sanofi has been looking to emerging markets and consumer products for new income as competition from generic drugs hurts sales. The anti-clotting drug Plavix which is Sanofi’s largest selling drug generating over $4.0 billion annually will lose patent protection in 2011-2012. Bristol Myers Squibb, Sanofi’s marketing partner for Plavix in the US, also exceeded $4.0 billion in sales last year.

Sanofi also announced today that it acquired the assets of Montreal-based Canderm Pharma, Inc a consumer products company for $1.9 billion signaling its intention to aggressively enter the North American consumer healthcare products markets.

Until next time...

Good Luck and Good Job Hunting

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Carl Icahn, who controls about 4.9% of the outstanding shares of Genzyme’s stock, is trying to get himself and three persons loyal to him elected to the Genzyme board of directors via a proxy fight. 

Icahn has publicly stated that embattled Genzyme CEO, Henri Termeer must go after running the company for the past 25 years. Icahn contends that Termeer has made many bad decisions during his tenure and the recent highly publicized manufacturing problems at the company are causing Genzyme’s stock to plummet.

Icahn’s slate of proposed board members include himself, Dr. Richard C. Mulligan, a molecular biologist at Harvard Medical School, Dr. Alexander J. Denner an Icahn confidant and Dr. Stephen J. Burakoff, Director of the Tish Cancer Center at Mount Sinai School of Medicine in New York. If elected the Icahn slate will replace Mr. Termeer, are Connie Mack III, a former United States senator; Richard F. Syron, the former chief executive of Freddie Mac and of Thermo Electron, a scientific instrument company; and Charles L. Cooney, a professor of chemical and biochemical engineering at the Massachusetts Institute of Technology.

As many of you may know, Icahn, who is always referred to as an “activist investor” is no stranger to proxy fights or controversy. Previously, he attempted to oust members of the Biogen-IDEC board of directors—an underperforming company according to Icahn—and more recently, publicly out-maneuvered and humiliated Bristol-Myers Squibb (BMS) CEO Jim Cornelius by selling ImClone—a long-time BMS co-marketing partner of the blockbuster colorectal cancer drug Erbitux— to Eli Lilly.

Over the years, I have been a staunch critic of Icahn. However, I am beginning to realize that there is a “method to his madness” and surprisingly, things always seem to change for the better at companies that are on his radar screen. Like him or not, Icahn demands performance from the companies that he invests in and will relentlessly work on behalf of himself and other shareholders to get the ROI that he expects.

Until next time,

Good Luck and Good Job Hunting!!!!!!!

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Bristol-Myers Squibb (BMS) announced Tuesday that its board authorized the repurchase of up to $3 billion of its common stock.

The company said the buyback program has no expiration date and will take place over the next few years. Company spokespersons said the decision reflects Bristol-Myers' strong financial position, which included $9.8 billion in cash and marketable securities at the end of the first quarter.

While stock repurchase programs are common, BMS is steeling itself for the expected loss of substantial revenues beginning in 2011 due to patent expiry of its top selling anti-clotting medication Plavix. In the past year or so, the company has sold off a profitable medical device subsidiary (Convatec) and a consumer products company (Meade Johnson) to sure up its finances and improve stock share price. 

Long be rumored to be a takeover target, BMS has attempted to reinvent itself over the past few years as a “next generation biopharmaceutical company” through licensing agreements and acquisition of smaller biotechnology companies with promising technology platforms and near term new biotechnology products (Medarex). However, the loss of Imclone—the biotechnology company that developed the one of the top-selling colon cancer drugs called Erbitux—to rival drug maker Eli Lilly has significantly slowed the next generation initiative.

Stay tuned for all late-breaking events.

Until next time…

Good Luck and Good Job Hunting!!!!!!

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Carl Ichan, the billionaire, activist investor notified Genzyme that he will seek shareholder approval to seat four handpicked directors including himself to be appointed to the company’s board of directors in an attempt to remove embattled Chairman and CEO Henri Termeer who has led the company for the past 25 years.

The move was widely anticipated by industry analysts because Icahn own one percent of outstanding shares of Genzyme’s stock.  Icahn and other large shareholders believe the company would be better off under new leadership. Termeer has publicly stated that he has no intention of resigning.

Until recently, Genzyme’s standing and reputation in the biopharmaceutical and orphan drug industry was second-to-none. However, the company’s inability to quickly correct ongoing manufacturing problems at its biomanufacturing facilities for the past year has been extremely embarrassing and costly. Sloppy manufacturing and quality control problems this past year led to major shortages of two main products, Cerezyme and Fabrazyme. Consequently, in 2009 sales revenues dropped and company earnings were almost flat. Further, Genzyme shares lost 26% of their value in 2009, sinking to a five-year low.

Icahn is no stranger to hostile corporate takeovers and company sales. In spring of 2008, he unsuccessfully tried to gain control of the Biogen/Idec board to force the sale of the company (Ichan owns 5.6% of Biogen/Idec’s outstanding shares). Later that year, Icahn engineered the sale of ImClone to Eli Lilly for $7.0 billion; after getting into a very public and often acrimonious fight with Bristol-Myers Squibb CEO Jim Cornelius who tendered a “low-ball offer” (according to Icahn) to purchase ImClone.

According to my calculations, Icahn is batting .500 for his recent corporate takeover attempts. Do you think he will be able to go 2-for-3? I bet Henri Termeer is hoping that he can’t!

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!

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Times are tough in the financially-struggling pharmaceutical industry and seemingly getting tougher.

First, Bristol-Myer Squibb (BMS) announced last week that it will freeze salaries but not cut yearly performance bonuses for its employees. One week later, Johnson & Johnson (J&J)—a company known not to be upstaged or outdone by a competitor—is planning on cutting the yearly performance-bonuses for 38% of its workforce and will freeze the salaries of certain other employees.

While BMS publicly announced its salary freeze, J&J plans were uncovered in an internal announcement and other company documents obtained by The Wall Street Journal. According to the Journal article, “The health-care giant told employees Jan. 25 that it is making the moves to standardize compensation across its various businesses and regions, thereby making it easier for its workers to move around within the company. In the U.S., the changes will bring bonus targets in line with market levels, one document said.”

Interestingly, J&J hasn't yet reported its CEO, William Weldon’s compensation for last year. In 2009, Mr. Weldon turned down a salary raise. His total compensation in 2008 fell 4.1% from the year before to $29.4 million, according to the most recent regulatory filing.

The salary freeze and bonus cuts help to explain why a good friend and lifelong J&J employee (25 years and counting) wasn’t too keen on the company during a visit earlier this week. During a conversation, in which I unknowingly lauded J&J’s treatment of its employees, my friend quipped “Looks can be deceiving; J&J is like every other big corporation. People really don’t matter—it’s all about P&L”

Until next time...

Good Luck and Good Job Hunting!!!!

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The past couple of weeks have been awful for employees at AstraZeneca and GlaxoSmithKline after both companies announced massive worldwide layoffs. Interestingly, the downsizing that has taken place at Bristol-Myers Squibb (BMS) in recent years has escaped notice; mainly because media attention has been focused on the sale of two of its non-pharmaceutical divisions, Convatec and Mead Johnson. The sale of these two divisions brought in roughly $8.0 billion giving BMS one of the largest cash reserves among major pharmaceutical companies. 

BMS announced two years ago that is would cut its global work force by 10 percent by 2011. Layoffs and cost cutting measures at BMS have been mainly driven by the impending patent expiry of the blockbuster anti-clotting agent Plavix and several other drugs. Plavix reportedly accounts for a disproportionate amount of the company’s annual sale revenues. Despite its new found largess, the company continues to eliminate jobs and shed employees. To make matters worse, BMS confirmed today (as reported on both Pharmalot and the WSJ Health Blog) that it will eliminate pay raises in 2010 for the people who still have jobs at the company. Luckily, bonuses were not eliminated. But as most people who work at big companies will tell you, bonuses are not guaranteed and discretionary. Check out the 2008 total compensation packages (salary, stock options, stock awards, pension etc).

While I don’t profess to have the credentials to be the CEO of a major pharmaceutical company, it doesn’t make sense to me to freeze the salaries of employees who are already overly anxious about whether or not they will have jobs when the next round of layoffs take place. Isn’t morale already bad enough?  Does management think employees will be at the top of their games and willing to work hard if they are constantly worrying whether or not tomorrow may be their last day of work?  Of course, naysayers will say that BMS employees should suck it up because they at least have jobs. However, I contend that management ought to invest a portion of the $8.0 billion in its employees rather then use it to buy several more companies to convince Wall Street analysts that BMS is truly a “next generation biopharmaceutical company.”  After all, employees are any company’s most valuable asset!

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!

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Last week, the market-analyst firm Manhattan Research released a list of the top branded pharma Web sites based on traffic generated from direct-to-consumer (DTC) television ads. The firm tracked about 250 different product sites and asked 6,575 consumers which websites they visited in the past 12 months. Consumers were asked to recall the reason they visited the site, whether they are taking the product, think they need the product, and the actions they took after they visited the site. The following list represents the top ten product websites that were more likely to have website traffic driven by DTC television ads. However, it is important to note that the rankings are not based on the volume of traffic but the percentage of traffic generated in response to integrated DTC advertising campaigns.  

1. NuvaRing—Merck (formerly Schering Plough formerly Organon)
2. Latisse—Allergan
3. Cialis—Lilly
4. Boniva—Roche
5. Abilify—Bristol Myers Squibb
6. Gardasil—Merck
7. Yaz— Bayer
8. Viagra—Pfizer
9. Levitra—Eli Lilly
10. Lunesta—Sepracor

Interestingly, of the top ten products on the list about 70% of them have to do with sex or woen's reproductive health. The exceptions include Abilify (depression and bipolar disease), Lunesta (insomnia) and Latisse (eyelash growth). Pfizer, Levitra and Cialis are treatments for ED, Gardasil is an anti-cervical cancer vaccine, Boniva is used to treat osteoporosis (post menopausal women) whereas Yaz and NuvaRing are both used for birth control.

I thought the results of the survey where interesting because many experts say the effectiveness of DTC television advertising may be waning with the growing use of online resources. While the results of this survey are not conclusive, it suggests that DTC television advertising won’t be going away anytime soon. And that the growing use of televisions as web portals may actually increase not diminish industry’s reliance on DTC television ads to sell its product and treatments—oy! 

Hat tip to George Koroneos at the PharmaExec.com blog.

Until next time...

Good Luck and Good Watching!!!!!!!!!

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Bristol-Myers Squibb (BMS) announced late yesterday that it intends to purchase Princeton, NJ-based Medarex for $2.1 billion. BMS and Medarex were working collaboratively to develop a monoclonal antibody called Ipilimumab as a treatment for late stage melanoma.

The acquisition represents BMS’s public commitment to transform itself into a “next generation pharmaceutical company” with both pharmaceutical and biotechnology products in its arsenal. Last year, BMS bought Kosan Biosciences, Inc a California-based biotechnology company developing novel cancer treatments. Also, as you may recall, BMS lost ImClone to Lilly in a bidding war over Erbitux—a monoclonal antibody-based colorectal cancer treatment that was co-marketed by BMS. 

Medarex was one of the last independent, public, late stage monoclonal antibody development companies in the biotechnology industry. Many of its competitors, like ImClone and Cambridge Antibody Technologies, had already been acquired by big pharma and I was wondering when Medarex would be acquired. I have always held Medarex in high regard and it is a solid and well position company. To that end, I recommended that my mother purchase Medarex stock several years ago telling her that I thought it had a huge upside. Not surprisingly, the stock has been soaring since the announcement; so much so that my mother called me today to tell me how smart I was—go figure.

It is not clear, at present, what effect, if any, the Medarex acquisition will have on the employment situation in New Jersey. Although BMS is headquartered in NYC, it has two large sites in New Jersey, one in Lawrenceville and the other in Plainsboro. As mentioned above Medarex is based in Princeton, NJ. BMS has been steadily downsizing over the past three years and I suspect that there may be more layoffs after the Medarex deal closes.  If there are layoffs, more are likely to occur on the Medarex side of the business.

While I have been critical of some of BMS’ strategic moves in the past, I think the Medarex acquisition is an outstanding one and BMS will likely benefit from it!

Until next time...

Good Luck and Good Job Hunting!!!

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Carl Icahn, former corporate raider, hedge fund owner and activist investor, is still trying to exert his influence at Biogen/IDEC a biotechnology company in which he owns 5.6 percent of its outstanding shares of stock.  As you may recall, last year, Mr. Icahn tried to wrest control of the Biogen/IDEC board to force the company to put itself up for sale. That attempt failed but yesterday Mr. Icahn was managed to get two of his allies appointed to the Biogen/IDEC board of directors at the company's annual shareholder meeting.

Mr Icahn has long contended that Biogen/IDEC's management team is inhibiting growth and squandering shareholder value. Wall Street analysts predict that Carl will push hard to split the company into two separate entities: one focused on neurobiology (Biogen/IDEC is a market leader for drugs designed to treat Multiple Sclerosis) and the other on cancer.  Another scenario suggests that he will leave the company intact and find a buyer for it--similar to the plan that he attempted to implement last year.

The Biogen/IDEC news follows quickly on the heels of a management coup that he orchestrated at Amylin Pharmaceuticals earlier in the week. On Tuesday, Mr Icahn, along with the hedge fund Eastbourne Capital management, were successful in ousting Amylin's Chairman Joseph C. Cook, Jr. and director James N. Wilson. Mr. Icahn exerted his influence at Amylin because he felt that sales of its key diabetes drug Byetta were too low.  Others believe that he is preparing the company for sale to Eli Lilly which co-markets Byetta with Amylin.

Mr Icahn is certainly no stranger when it comes to maximizing shareholder value at biotechnology companies where he holds substantial stock positions.  Last year, he orchestrated the sale of ImClone to Eli Lilly after getting into a protracted bidding war with Bristol Myers Squibb (BMS) over the cancer drug Erbitux.  At that time, BMS had an exclusive marketing agreement with Imclone for US sales of Erbitux.

Whether or not you like Carl, he is very good at what he does. And, in the end, he has a gift for maximixing shareholder value of companies that he and others have invested in!

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!

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In a  previous post,  I suggested that more layoffs would occur at Bristol-Myers Squib (BMS) by December, 1, 2008. The Pharmalot Blog reported today that 800 more BMS employees ( including scientists) would lose their jobs before the end of 2008. Okay, so I was off by about two weeks.

A company spokesperson told the Pharmalot folks that “We are reducing the global Bristol-Myers Squibb workforce as part of our previously announced second wave of productivity initiatives designed to enhance our ability to address the significant challenges and uncertainties our company faces in the short- and long-term. Headcount reductions associated with the second wave of productivity initiatives will continue through 2010, with a goal of a 10 percent reduction in our global workforce. This [layoff of 800] is in addition to the 10 percent workforce reduction previously announced in December 2007.” 

Things are obviously not going well at BMS these days. Look for more layoffs in early 2009 and beyond. Who do you think is going to buy BMS?

Until next time…

Good Luck and Good Job Hunting (Try Lilly I hear ImClone is looking for a few good men and women)

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The Pharmalot blog reported today that Bristol-Myers Squibb will be laying off 5% of its workforce (~ 34 employees) by year’s end at its manufacturing facility near Syracuse, NY. And, Sanofi-Aventis announced that it will be giving pink slips to about 10% of its sales force —about 650 reps—before the end of the year.

To make matters worse, Merck released its annual revenue projections for 2009 today which suggest that its earnings and revenue will not meet Wall Street expectations. Merck recently “cleaned house” and eliminated thousands of scientific and mid-management jobs. The list of pharmaceutical companies that have downsized in 2008 includes Merck, BMS, GlaxoSmithKline, Novartis, Schering Plough, Boehringer Ingelheim, Wyeth and Sanofi-Aventis. I probably missed a few but who is counting?

Until next time….

Good Luck and Hold On to Your Job (if you can)

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Bristol-Myers Squibb (BMS) made a presentation this morning at the Credit Suisse Healthcare Conference that showed the company plans on saving an additional $2.5 billion in “productivity initiatives.” According to its new CFO, the company plans to squeeze the savings out of “headcount and related costs” — which  likely means more downsizing and layoffs.  Rumors have it that these job cuts will take place by December 1, 2008 just prior to when employee bonuses are traditionally decided.

To make matters worse, the Pharmalot blog reported today  that "the drugmaker earlier this week sent a voicemail to employees saying a 2 percent cost of living increase will be given this year to those who are meeting or exceeding performance standards."  The announcement has lead to speculation among BMS employees whether or not the same ceiling will be applied to the bonuses and stock rewards handed to Bristol-Myers CEO Jim Cornelius and members of his executive team.

Heavy losses incurred  by its former CFO who "bet the store" on mortgage-backed securities coupled with the recent, highly publicized failure of Jim Cornelius to purchase ImClone (to gain complete control over the multi-billion dollar Erbitux franchise) suggests that the future of the company may be in serious jeopardy.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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A little over a year ago, Bristol-Myers Squibb (BMS) launched its “productivity transformation initiative” (PTI) designed to “transform” the company into a next generation biopharma leader. As most of you may already know, PTI is corporate speak for layoffs and downsizing.

The PTI was largely in response to impending loss of patent protection in 2011 of its blockbuster Plavix, an anti-thrombosis drug that BMS co-markets with Sanofi Aventis. While BMS has a deep and innovative drug pipeline, the likelihood that the company will be able to replace Plavix revenues with one of its investigational drugs is remote.

To make matters worse, late last week, one of Plavix’s likely successors, an investigational anti-clotting drug called apixaban (being co-developed with Pfizer) failed to meet its primary clinical endpoints in a pivotal Phase III clinical trial called Advance 1 which was designed to evaluate the drug for prevention of venous thromboembolism in patients undergoing total knee replacement.  The 3,195-patient study compared apixaban, an oral Factor Xa inhibitor given at a dose of 2.5 mg, twice daily, to twice-daily 30mg injections of Sanofi-Aventis’ Lovenox (enoxaparin). This late stage clinical failure prompted the company to announce that it would no longer seek approval of apixaban in 2009 as previously planned.

Early this week, BMS ratcheted up the PTI and imposed a total hiring freeze for all permanent employees, consultants and leased workers (contractors). Previously, vacated permanent or temporary positions could be refilled if appropriate, qualified job candidates were identified. Finally, the company announced today that it would permanently ground its corporate fleet of jets that was operating out of Mercer County Airport in Trenton, NJ. According to an article in my local paper, the Trenton Times, BMS plans to sell four aircraft and layoff about 32 employees, mostly pilots and mechanics. 

Despite all of the other PTI initiatives implemented to date, the decision to sell all of its corporate jets sends a clear signal to stakeholders that BMS truly “means business”! I guess Jim Cornelius and other BMS executives will have to book commercial flights or take Amtrak to out-of-town meetings for the foreseeable future. That said, I doubt that Jim and others will be driving or taking the train to meetings in New York City or Washington—the corporate helicopter fleet is still operating!!!!!

Until next time….

Good Luck and Good Job Hunting (forget BMS)!!!!!!!

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Rumor has it that Sam Waksal was released from prison and is now living in a halfway house in the Bronx, NY. Waksal has a year remaining on his 2001 conviction for insider trading and fraud.

Now that Sam is out of jail, he can watch BMS takeover the company that he created way back in the early 80s. I suspect that he feels vindicated in some ways because BMS is willing to pay over $4.5 billion for ImClone. On the other hand, think of how much money he would have made if he didn’t get greedy.  As a stock broker friend of mine likes to say, “Bulls make money but pigs get slaughtered.”

The one thing that I know for sure is that Sam will not be calling his broker about ImClone shares this time!  

Until next time….

Good Luck and Good Job Hunting!!!!!!

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Despite an increase in profits, BMS announced today that it will continue with its Productivity Transformation Initiative (PTI) that was instituted last fall. According to the PTI, BMS must save $1.0 billion over the next 2 years. Of course, the only way to accomplish this is by laying off employees whose jobs are not directly related to the process of transforming BMS into a “ next generation biopharma company” (Would somebody please write me and explain what that means)???? I suspect that BMS employees will be receiving “pink slips” after Labor Day.

This has been a devastating week for the NJ-based pharmaceutical industry. First, Teva announced last week that it will buy Montvale NJ-based Barr Pharmaceuticals and then earlier this week Roche issued a press release indicating that it will move its corporate headquarters from Nutley NJ to South San Francisco (Genentech’s headquarters) by 2010. The impending layoffs at BMS coupled with job freezes and downsizing at other NJ pharma companies like Schering Plough and Merck may signal the beginning of the end of New Jersey’s status as the “nation’s medicine chest.”

Until next time….

Good Luck and Good Job Hunting (forget New Jersey)!

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According to a post over at Pharmalot, BMS may be positioning itself for sale or readying itself as a potential M&A target.   

Although BMS has been rumored for years to be a takeover target, the impending loss of revenues generated by its anticlotting drug Plavix (co-marketed with Sanofi-Aventis) due to patent expiry in 2011 is wreaking havoc at the company.  As much as 50% of BMS’s revenue is generated by the Plavix franchise. The impending loss of Plavix suggests that thing must drastically change at the company in order for it to remain independent.

Time will sell….I mean tell....!!!!!

Until next time….

Good Luck and Good Job Hunting!!!!!!

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I have been following the pharmaceutical business for the past 20 years or so and without fail; Bristol-Myers Squibb has been rumored to be a takeover target. Well, here we go again!

 that floated the possibility that BMS is a prime takeover target again. Like many other financial pundits, Zachs believes that a takeover by Sanofi-Aventis makes the most sense. As many of you may know, BMS and Sanofi-Aventis co-own the multibillion dollar Plavix franchise (which will lose patent protection in 2011).

Rumors of a BMS takeover started in 1988 and they have always proved to be false. In my opinion, BMS has one of the stronger biologics pipeline in the pharmaceutical industry. Further, BMS is spending an enormous amount of time and resources to vigorously reinvent itself as a “next generation biopharma” company (whatever that means). The impending loss of Plavix revenues does put some pressure on the company’s ability to remain independent, but BMS has weathered many storms in the past (and lived to talk about them). That said, it is anybody’s guess whether the current rumors are real or imagined.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

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Bristol-Myers Squibb announced today that it will purchase California-based Kosan Biosciences for approximately $190 million. Kosan has been developing two classes of oncology drugs known as heat shock protein 90 (Hsp90) and epothilones. One of Kosan's Hsp90 compounds is currently in Phase III clinical testing for the treatment of multiple myeloma.

Kosan’s epothilone program will complement existing BMS programs designed to develop novel chemotherapy-based oncology products. The Hsp90 clinical program will help to sure up BMS’s push to become a next generation biopharma company.

Kosan was originally founded as an antimicrobial drug development company based on a novel combinatorial drug development (polyketide) platform but eventually morphed into a cancer-focused business. In addition to Kosan’s pipeline, BMS will inherit a small GMP biomanufacturing facility.

The acquisition is good news for Kosan which has been struggling of late. Unlike most other companies, BMS usually retains the employees of companies that it acquires. That said, only time will tell.

Until next time…

Good Luck and Good Job Hunting!!!!!!! 

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