Bristol Myers

           Bristol -Myers

Arminda Carroll

January 30, 2016

MBA 678

Dr. Virgil Mensah-Dartey

        Bristol-Myers Squibb was initially found in in New York in 1858 by Edward Squibb, M.D., and in 1887 his friends William McLaren Bristol and John Ripley Myers purchased a drug company in Clinton. Together these three businessmen founded the successful company of Bristol-Myers Squibb (Bristol-Myers Squibb, 2015). The company produces pharmaceutical drugs that treat depression, cardiac conditions, arthritis, and hepatitis. Bristol-Myers Squibb is a global supplier of pharmaceutical drugs.

Analysis and Evaluation

        Bristol-Myers Squibb has been a sustainable and profitable pharmaceutical company since 1887, but in 2007 they experienced an unforeseen issue. The three top selling drugs of the company, Abilify, Plavix, and Pravachol would be going of patent in 2012. The drug pipeline for this company was almost empty. This issue caused stock prices to fall below its competitors (Thompson, Strickland, and Gamble, 2014).          

Introducing new drugs is not an easy process, as it is very time consuming and costly. Research and development typically takes about 13 years and the cost can be around two billion dollars. During this time the competing drug companies were investing in over the counter drugs to gain profit and be more diversified.

Bristol-Myers Squibb decide to follow a different strategy. They decided to use the strategy horizontal acquisitions with product diversification. The company named their strategy “ string of pearls” (Thompson, Strickland, and Gamble, 2014). They targeted small companies in new treatment areas. Bristol-Myers Squibb developed the objective to single out some pre-identified drugs the smaller companies had because they needed money and Bristol-Myers Squibb needed the drugs. Bristol-Myers Squibb sold its stake in Mead Johnson to obtain the needed cash to implement the strategy. In 2007 the company began investing its money, they spent over eight billion dollars on just 18 transactions. This study lead to new assuring drugs for common diseases, such as cardiovascular disease, arthritis, cancer, and hepatitis C. In 2012 Bristol-Myers Squibb had added over four billion in new revenue. From the period of 2007 and 2012 their stock prices rose over 20% and they were out performing their competitors. In 2014 Bristol-Myers Squibb had a net sales of 15.9 billion. Although, the patent had expired on abilify it is still one there top selling products. Below is revenue from each product (Bristol-Myers Squibb, 2015).