Bristol Myers Squibb

Bristol Myers Squibb was formed in 1887 when McL arn Bristol and John Ripley Myers bought the Clinton drug familiarityceutical club in Clinton New York. In 1900 Bristol-Myers broke d ace with(predicate) into the black &8212 it has remained in that location ever since. In 1924, gross remuneration topped $1 cardinal for the archetypical time in Bristol-Myers history. The play alongs crossings were then sell in 26 countries. At this point, the sh ares held by John Myerss heirs became gettable for sale, triggering a series of moves that in 1929 turned Bristol-Myers into a populacely held lodge, listed on the New York Stock Ex potpourri.The postwar depression prompted Bristol-Myers to jettison its pharmaceutical vexation and devote itself entirely to its specialties Sal Hepatica and Ipana, its two big winners, and a xii or so assorted toiletries, antiseptics and cough syrups. By the end of the war, it was light rough that penicillin and opposite antibiotics represented an immense opportunity for Bristol-Myers. In 1921 the Squibb Company coined its motto The priceless ingredient in all(prenominal) product is the honor and truth of its puzzle outr, which is flat the corporal slogan of Bristol Myers Squibb.In 1989 Bristol-Myers merged with Squibb, creating a inter subject drawing card in the health care industry. The merger created what was then the earthly concerns second-largest pharmaceutical initiative. BMS is now ranked 8 in the pharma sector. Current Drugs, Issues and Inte remains The Company operates in three segments Pharmaceuticals, Nutritionals and Other Healthcare. The Pharmaceuticals segment is do up of the global pharmaceutical and international consumer medications occupancy. The Nutritionals segment consists of Mead Johnson Nutritionals (Mead Johnson), primarily an child formula and childrens nutritional business.The Other Healthcare segment consists of ConvaTec, Medical tomography and Consumer Medicines (United province s and Canada) businesses. In 1991, the companion received U. S. Food and Drug Administration (FDA) panegyric in the U. S. for Videx (didanosine) in any case known as ddI, making it the second medicine easy for treating human immunodeficiency virus infection (the other organism AZT). Other approvals that course of study included an antibiotic, Cefzil (cefprozil) two cardiovascular agents, Pravachol (pravastatin sodium) Tablets and Monopril (fosinopril sodium) Tablets and a central flya panache governing body drug, Stadol NS ( providedorphanol tartrate) C-IV.In that same yr, the companies signed a Cooperative Research and phylogeny Agreement with the National Cancer Institute to research and develop a all overbold compound for treating certain types of preemptcer. This compound, TAXOL (paclitaxel) Injection, immediately was established as the go withs top research priority. Bristol-Myers Squibb invested hundreds of jillions of dollars to supply TAXOL in sufficient quanti ties for clinical trials, to prepare data for regulatory submission and to develop alternative sources of TAXOL (which in the first place was derived from the bark of an endangered tree, the Pacific Yew).TAXOL launched in 1993 and quickly became one of the domain of a functions well-nigh widely used jackpotcer interventions. For a a couple of(prenominal) long time BMS held the exclusive up obligations 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 connection had over 60 product lines with $50 gazillion or to a greater extent than in annual sales cistronral. At the scratch line of 1998, the FDA granted clearance to market Excedrin Migraine for the relief of migraine vexation pain and associated symptoms. Excedrin Migraine became the first migraine headache medication visible(prenominal) to consumers without a prescription.In 1999, Bristol-Myers Squibb inform SECURE THE FUTURE, a $100 million committedness to advance human immunodeficiency virus/AIDS research and community outreach programs in five southern Afri disregard countries siemens Africa, Botswana, Namibia, Lesotho and Swaziland. And in two hundred0, Bristol-Myers Squibb, together with tetrad other pharmaceutical companies and international agencies, joined the UNAIDS Drug main course Initiative. The ACCESS program aims to make antiretroviral medicines and therapies to treat opportunistic infections more widely available in African countries that shake up veritable a coherent national AIDS strategy.As part of the program, the partnership offered 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, stop HIV/AIDS drugs below exist in Africa and committing an additional $15 million for extending SECURE THE FUTURE to four Western African countries &8212 Burkina Faso, Cote dIvoire, Mali and Senegal. The beau monde is also ensuring that its patents do not pr hithertot inexpensive HIV/AIDS therapy in Africa.The patent for Zerit, rights to which are owned by Yale University and Bristol-Myers Squibb, is now available at no bourns to treat AIDS in southern Africa. However, issues like losing patents like this and a few more in South Africa has take a shitd many worrys for drug companies and BMS is not immune to them. In family 2000, Bristol-Myers Squibb announced a in the buff strategy that includes a sharpened contract on medicines and an aggressive external development program. As part of this unsanded 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 billion an acquisition intended to further strengthen Bristol-Myers Squibbs medicines business. With the DuPont acquisition, Bristol-Myers Squibb added Sustiv a (efavirenz) Capsules to its HIV portfolio and also gained products such as Coumadin (warfarin sodium tablets, USP) Crystall(a)ine, the U. S. leading dictate anti-coagulant and Cardiolite (Kit for the preparation of Technetium Tc99m Sestamibi for Injection), a aesculapian imaging agent.In November 2002, the FDA approved Abilify (aripiprazole) for the discourse of schizophrenia. In 2003, the company squaded up with cancer survivor and Tour de France one Lance Armstrong to sponsor the Bristol-Myers Squibb TOUR OF HOPE, an unprecedented week-long coast-to-coast cycling event. En route, the 26-member team of cancer survivors, caregivers, physicians, nurses and researchers raised awareness of cancer research and the immensity of clinical trials in developing new words.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 Europe in March 2004. On March 29, 2005, the FDA approved Baraclude (entecavir). Baraclude, notice by Bristol-Myers Squibb scientists, is indicated for the treatment of chronic hepatitis B infection. Bristol-Myers Squibb announced the FDA approval of Orencia (abatacept) for the treatment of rheumatoid 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 art object 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 s trategy they are focusing on ten diseases, these are affective (psychiatric) disorders, Alzheimers/dementia, atherosclerosis/thrombosis, diabetes, hepatitis, HIV/AIDS, obesity, oncology, rheumatoid arthritis and related diseases, and solid pipe organ transplant. Current Financials The current financial instruction of the company from MSN Central is as below. The receiptss have not been growing in spite of all the make products that have been launched and that is an area for change. The company inevitably to improve its revenues and have a positive trend in profits too.The profits are almost 16%, however, that looks pale when compared to GSK and Merck both in the 20- 22% range (Fortune cholecalciferol 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 geezerhood in 2007 is poor. As discussed in the current drugs, issues and interests section, the company is focusing on s ome key diseases and getting some fantastic drugs in the market. However, all this is somehow not improving the revenue. In fact in the fit 5 years, revenue has grown at less than 2% year on year.On the current price ($24), the persona gives a 6% set up on investment (EPS is $1. 43). Currently, they are benefiting from the effects of letting go of their chief executive officer Peter Dolan and the company is touted as a takeover target. Their major problem is the failure to prevent Apotex from manufacturing Plavix. Although BMS tried to stop Apotex by getting into a deal that would give Apotex $40 million for not manufacturing the drug, the US State Attorney Generals however didnt let the deal go through and instead the company got into an investigation because of the whole mess that the deal created.From the BMS perspective, they were doing the right thing 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 clashing on the dividend given by the company and most analysts have suggested that the dividend payout result have to be cut by almost 30-40 cents it was $1. 12 the former year.BMS has a good line up of drugs that are in the grape vine and would be a good takeover for any pharma company that has strong cash flow except weak pipeline. These are rumors only(prenominal) if looking at the current scenario, it is a good possibility. The interim chief operating officer James Cornelius headed Guidant and helped its sell-off. Vision, Mission and Goals The current vision mission and goals of BMS are referred as a present. The covenants are to different 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 &8212 to our patients and custo mers, to our employees and partners, to our shareowners and neighbors, and to the world we go &8212 to act on our belief that the priceless ingredient of ein truth product is the honor and justness of its maker. To Customers We pledge excellence in everything we make and market, providing the safest, most effective and highest-quality medicines and health care products. We shout to continually improve our products through existence, 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 embed upon continued harvesting, strong finances, productive collaborations and innovation in research and development. To Communities We pledge conscientious citizenship, a helping hand for worthwhile causes and constructive activeness that supports a clean and healthy environment. We pledge Bristol-Myers Squibb to the highest standard of moral and honorable b ehavior and to policies and serves that fully embody the responsibility, integrity and decency required of free enterprise if it is to merit and maintain the confidence of our society.The new era for BMS must mark off that the pledge to the shareholders is held more firmly than it has been in the last few years. The company must improve revenues and margins. The stagnant revenues and profits are a cause for worry in the longer run. All pharma companies are chip against small 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 learns to manipulate that the scandals that have been hitting it in the last 5 years never happen again and the company needs to have a high standard of facial gesture.Shareholder value erodes very quickly for many drives, notwithstanding off the last 3-5 years, unified governing has been a major issue. Companies with tens of billions o f dollars of revenue have disappeared and strainingholders have suddenly agnisen their investment disappear with them. BMS has serious corporate governance issues. The company was hit by financial scandals when it was caught pushing inventories and show them as sales. They have a court appointed overseer because of demo higher revenues and now with the Plavix issue they are in an even large mess as far as corporate governance goes.Apart from that, according to IMS health, a pharmaceutical information and consulting company, sales of prescription medicines worldwide rose 7% to $602 billion,. The United States s savings bank 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 tho 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 boilers sheath picture 10 -20 years from now we see that the population of the developed world is going to excise and thither testament be more and more slew who volition be retired.This also means there will be more medicines required. I do not see myself dying at the age of 70 in the year 2040 medical technology will be so advanced in the contiguous 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 question beckons that the raft 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 developing world, but the diseases that BMS is targeting are all that need rafts 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 really high and people find it hard to afford Taxol. In my opinion, BMS has to handle 2 issues First is Corporate Governance and the second is to crack the developing markets and increase market share in those countries, this will mechanically 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 cost 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 fairness. Key Change 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 corporate governance are1. The first issue is to change the behavior of bosses who force employees to act in ship canal that will be against any corporate 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 ternary change will be in terms of managing the markets and turn outations of all stakeholders, in conclusion it is the expectations of the mark ets or other stakeholders that push the employees to cover up things or show a bright picture when there is none.It is important to manage the expectations. The succeeding(a) key change after(prenominal) corporate governance is to catch that we can capture the growing markets. To capture the new markets, we will have to make a couple of changes in the elan we do business. These changes are presumable to be as follows 1. Lower the cost of drugs most of the currency goes into research. The drugs that get over markets cost hundreds of millions of dollars to make. So the cost of developing drugs has to be bring down, once this cost is lowered, the cost of the drug per se can also be lowered accordingly.2. Come with products that cater to the growing segments there it is likely that the people in the developing countries will be using medicines that are generic. For a brand product to conquer that market, the companies have to give an added value to their product. This busines s leader mean, reworking some of the old compounds and coming up with extra strong versions or other versions that would differentiate the medicines BMS could come up with a line of medication aimed at women with PMS or aimed at people over 70.This big businessman be the normal medicines, but with a different potency or properties so that they would be erupt suited to a different age group. 3. Newer gene types this great power 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 respond 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 slender Change requirement is Corporate G overnance. Corporate Governance is something that every company talks and boasts about but as we can see in case of BMS, this has failed grossly. The company actively needs to change the fleck at bottom its departments and oddly in the higher ranks to improve the Corporate Governance scenario and recrudesce people about the problems that are caused because of bad governance.Before I dwell into how to storm corporate governance, I would like to talk about why officials higher up in the ranks and even some in the lower ranks fall back to concealing information that might be damaging to the company. The first reason is to ensure that their jobs are secure. If a person conceals information it is because they feel that the fussy piece of information will be damaging to their job, their department or their interest. This is the basic level and it is very individualistic. However, it is this same thing that drives even the bigger corporate information scandals.The second reason for concealing information or stateing wrong figures is to ensure that the company meets 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. Different 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 cyclorama for example, vista has been obstructed 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 dama ge that their actions are causing.Concealing information today will have its repercussions in the next two quarter and eventually if someone finds out the true picture, the stock market will kill the script and the valuation will suffer enormously. However, a public announcement about the delay will cause temporary nightfall in the stock valuation (till the product is back on tether 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 responsible for not delivering the results.The cost of revealing the truth means jobs and immediate losses in the stock markets. Many of the higher ranking officials have stock options and this makes it even more lucrative 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 worse because of the stock options but it can be much 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 persist beyond every employee and every leader. One employee or a leader cannot make the company, there is always a team. However, a leader can easily 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 advise the spare-time activity 3 changes 1. Top down pressure to conceal information 2. protective temper for sing 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 maturate members have to set the rules and deal facts with an iron hand. All directors and solid ground Heads must be respo nsible towards Corporate Governance and the Finance people especially should run their reports through the board. The board must appoint an freelancer third party evaluator and auditor to ensure that the reports being presented are correct and any discrepancy must be dealt by terminating the verdant 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 motivating factor in concealing information and we can expect people to take a long term view of the situation instead of a short term view based on when their stock options might be due. With a personal lure of money gone, the top oversight 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-of fs or corporate governance whistle 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 simmer down 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 experience all corporate policies.The country heads must have audits from outside parties to ensure the authenticity of the financ ial 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 ask is to re-align the salary 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 upper management to ensure that they dont abuse their precedent to increase the value of their shares. The stock option change will also weed out the people who do not have a longing 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 close to their heart, and of course these people are there for the long term.Protective cli mate for whistle blowers The next issue we need to cover is about defend 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 element, where people can keep 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. plenty 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 bl owers.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 asunder 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 rescue the company and their own reputations.