UPDATE: Bristol Seeks To Buy Biotechs Worth Around $1 Billion
May 05 2009 - 11:58AM
Dow Jones News
Bristol-Myers Squibb Co. (BMY) is looking to acquire either
privately held biotechnology companies or those worth about $1
billion following initial public stock offerings, the drug maker's
leader said Tuesday.
Chief Executive James Cornelius told shareholders at the drug
maker's annual meeting Tuesday in Plainsboro, N.J., that
Bristol-Myers hoped to gain some of the benefits of a large-scale
acquisition "without spending tens of billions of dollars" as some
of its larger rivals have.
Cornelius said the New York company, which markets the Plavix
anti-clotting drug, could remain independent by making smaller
acquisitions and striking drug-development partnerships with its
rivals, as it did two years ago with Pfizer Inc. (PFE) and
AstraZeneca PLC (AZN).
Cornelius's comments indicate that Bristol-Myers is prepared to
go it alone even as the pharmaceutical industry undergoes a wave of
consolidation. In recent months, Pfizer agreed to buy Wyeth (WYE)
in a deal originally valued at about $68 billion, while Merck &
Co. (MRK) agreed to buy Schering-Plough Corp. (SGP) for about $41
billion. Also, Roche Holding AG (RHHBY) bought the stake in
Genentech Inc. (DNA) it didn't already own for about $47
billion.
Last year, Bristol offered to acquire full control of its
biotech partner ImClone Systems but lost a subsequent bidding war
to Eli Lilly & Co. (LLY). Now Bristol-Myers is flush with about
$9 billion in cash and marketable securities, some of which it's
prepared to put to use on deals.
Cornelius said there are at least a dozen drug companies about
the same size as Bristol-Myers that are still independent and
following their own strategies.
Separately, Cornelius said Bristol-Myers was "getting very
little credit" in its stock price for the research money it has
spent on about a half-dozen experimental drugs that Cornelius
thinks have big commercial potential.
Bristol-Myer's pipeline includes diabetes drug saxagliptin,
which is currently under review by the U.S. Food and Drug
Administration.
Bristol-Myers shares rose 30 cents, or 1.5%, to $19.83 Tuesday
morning. The stock is off nearly 15% year-to-date.
Bristol shareholders elected 11 directors to the company's board
Tuesday. Also, some 54.7% of shares present were voted in favor of
a shareholder proposal asking the board to permit 10% of shares
outstanding - or the lowest percentage allowed by law above 10% -
the power to call special shareholder meetings. Bristol's board had
opposed the measure, saying it was vague and would be illegal in
Delaware, where the company is incorporated.
A shareholder proposal to seek an advisory vote on executive
compensation practices was defeated, garnering 46.6% of shares
voted.
-By Peter Loftus; Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com