Bristol names Cornelius CEO

NEW YORK (Reuters) - Bristol-Myers Squibb Co. (BMY.N) on Thursday named interim Chief Executive James Cornelius as CEO of the drugmaker for the next two years, and reported first-quarter earnings well above forecasts.

The company also announced a $1 billion deal with Pfizer Inc. (PFE.N) to help develop and sell Bristol's promising apixaban drug to prevent blood clots.

The drugmaker's shares fell 3.3 percent after analysts speculated its tie-up with Pfizer could deter other drugmakers from making an attempt to acquire Bristol.

The better-than-expected quarterly results were due largely to lower operating expenses and a tax rate barely one-third that of the 2006 period.

Cornelius, who has been interim head of Bristol-Myers since Peter Dolan was fired as chief executive last September, will be CEO through the company's annual stockholder's meeting in the spring of 2009, Bristol said.

Deutsche Bank analyst Barbara Ryan said Cornelius was given his two-year CEO contract because Bristol, which has been beset by generic competition and government investigations, could not lure an external candidate.

"We view this as a purely cosmetic move to minimize the distractions and questions created by his interim status," Ryan said.

Cornelius, former chairman of medical device maker Guidant, spearheaded its sale for $27 billion to Boston Scientific Corp. (BSX.N) just months before assuming his interim leadership role at Bristol.

His deal-making skills had fueled speculation that Cornelius would welcome overtures by other drugmakers to acquire Bristol and its experimental cancer drugs.

Sanofi-Aventis (SASY.PA) has been considered to be the most likely possible suitor because Bristol co-markets its blockbuster blood-clot drug Plavix and its Avapro blood-pressure treatment. Schering-Plough Corp. SGP.N has also been widely mentioned.

"(The) decision to appoint James Cornelius as permanent CEO will do little to stop the investment community's general belief that the company will be sold," said Prudential analyst Tim Anderson, who considers Sanofi the most likely bidder.

Although the apixaban deal with Pfizer may dampen enthusiasm among possible Bristol suitors, Ryan said "a potential takeout" by another drugmaker remains likely.

Bristol earned $690 million in the first quarter, or 35 cents per share, compared with $714 million, or 36 cents per share, in the 2006 period.

Excluding special items, it earned 38 cents per share. Analysts on average had expected 23 cents per share, according to Reuters Estimates.

Bristol raised its 2007 earnings forecast to between $1.30 and $1.40 per share, from an earlier view of $1.20 to $1.30, helped by lower taxes. Last year the drugmaker earned $1.09 per share.

Like many other large U.S. drugmakers in recent weeks, Bristol's profit sailed past Wall Street estimates, as its quarterly sales of $4.48 billion topped the Reuters Estimates forecast of $4.32 billion.

But revenue was down 4 percent from last year's first quarter, hurt by competition from generics, including a copycat form of Plavix launched in the United States last summer by Canada's Apotex Inc.

Global sales of Plavix fell 5 percent to $938 million. Sales of cholesterol fighter Pravachol plunged 75 percent to $135 million, while cancer treatment Taxol fell 24 percent to $111 million.

Bright spots were Avapro, whose sales rose 16 percent to $270 million, and schizophrenia treatment Abilify, whose revenue jumped 29 percent to $366 million, helped by its favorable safety profile. Cancer drug Erbitux, sold in partnership with ImClone Systems Inc. IMCL.O, rose 16 percent to $160 million.

Bristol-Myers said it will receive an upfront payment of $250 million from Pfizer under the deal for apixaban, which in clinical trials has reduced rates of death and clots in the legs and lungs of patients who have undergone orthopedic surgery compared with standard treatments.

Late-stage trials of apixaban began last year for prevention of strokes among people with atrial fibrillation, or irregular heartbeat. If successful in those studies, the drug is considered a possible blockbuster replacement for Bristol's poorly tolerated but widely used medicine Coumadin (warfarin).

Bristol-Myers said it could receive additional payments of up to $750 million from Pfizer based on development and regulatory milestones for apixaban.

Bristol shares were down 97 cents at $28.73 in late-morning trading on the New York Stock Exchange.