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For instance, Bristol-Myers brought in $895 million this quarter when Eli Lilly (NYSE: LLY ) paid it for the 17% of ImClone that it owned, which brought its war chest up to about $8 billion.
OK, maybe Bristol-Myers is only at mini-Pfizer stage now; before the Wyeth announcement, Pfizer had about $26 billion in cash and equivalents. But Bristol isn't done saving for a rainy day. It'll also get some of the proceeds when it spins off its Mead Johnson Nutrition business in the first half of this year -- a 7% year-over-year increase in revenue last year by the baby formula business should help secure a good price for the IPO.
And of course the company is adding to its cash reserves the old-fashioned way -- by earning it. Bristol-Myers didn't release a cash flow statement with its earnings yesterday -- we'll have to wait for the 10-K -- but the 12 months through September resulted in more than $3 billion in free cash flow. And the company has a plan to increase operating cash flow by $1 billion by the end of next year.
Earnings, which came in up 37% for the year after adjustments, are all fine and dandy, but it's cash that's king and cash is what Fools should be paying attention to. The green stuff pays for the pipeline additions like Bristol-Myers' recent deals with Exelixis (Nasdaq: EXEL ) and ZymoGenetics (Nasdaq: ZGEN ) , and it pays investors' dividends, as well.
Let's just hope that not getting in a bidding war with Eli Lilly for ImClone is a sign that Bristol-Myers' management is a better value investor than Pfizer's management.