Bristol CEO says "pure pharma" strategy paying off
NEW YORK (Reuters) - The Chief Executive of Bristol-Myers Squibb Co said the company intends to remain "100 percent" in prescription medicines and is prepared to use its $10 billion cash hoard to gain new drugs through moderate size deals with other drugmakers.
Lamberto Andreotti also told scores of industry executives and analysts that the company's recently approved Yervoy medicine for metastatic melanoma continues to generate good initial sales.
"We will continue to remain 100 percent pharma," Andreotti said at the Pharmaceutical Strategic Alliances Conference in New York. He said it was beneficial to have "the entire management team strictly focused on one business."
"We can continue to be successful as 100 percent pharma," said Andreotti, whose company is deemed by many analysts to have the strongest lineup of recently approved drugs and medicines in the late stages of development in the industry.
The 153-year old company now focuses completely on prescription medicines after having divested its consumer product, medical devices and nutritional products divisions. Its former brands include Excedrin and Bufferin headache medicines and Convatec wound-healing products.
Two years ago the company spun off its majority stake in Mead Johnson, a leading nutritionals company that sells Enfamil baby formula, to focus on traditional prescription pills and sophisticated biotech drugs.
Meanwhile, big rivals such as Pfizer Inc, Merck & Co Inc, Novartis AG, Johnson & Johnson and Sanofi SA say they get more reliable profit growth from an array of product lines, including animal health, consumer healthcare products and low-cost generics.
And unlike larger drugmakers such as Pfizer and Merck that have grown by gobbling up rivals through huge deals, Andreotti says Bristol has avoided going down that path.
"We didn't have to go through the disruption of mergers," he said, noting that the 1989 Bristol-Myers tie up with Squibb was many years before his time at the helm.
Bristol-Myers has captured attention for Yervoy, a biotech drug that spurs the immune system to fight advanced melanoma -- the deadliest form of skin cancer. It was approved in March and some analysts expect it to eventually generate annual sales of $6 billion as the first approved drug shown to extend survival of such patients.
Yervoy, which costs $120,000 for a full course of treatment, chalked up second quarter sales of $95 million -- its first quarter on the market.
Andreotti declined to discuss Yervoy sales for the third quarter, but said the drug "continues to do well."
Bristol-Myers acquired Yervoy through its $2.4 billion purchase of Medarex Inc in 2009. The company generates more than half of its revenue from deals it has made with other drugmakers, most far less costly than the Medarex transaction.
Andreotti noted that earlier on Thursday the company announced a collaboration with Ambrx Inc for an upfront payment of $24 million that gives Bristol-Myers access to drugs for type 2 diabetes and heart failure that he called "potential best-in-class" medicines.
Bristol-Myers has about $10 billion in cash with which to forge other deals.
"It feels very good to have $10 billion," he said, flashing a big smile. "And it feels good to have it in the U.S."
(Reporting by Ransdell Pierson and Bill Berkrot; editing by Andre Grenon)