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After spinning off baby-formula maker Mead Johnson Nutrition (NYSE: MJN  ) last quarter, Bristol-Myers Squibb (NYSE: BMY  ) has completed its conversion to full-time drugmaker.

Divesting Mead Johnson and other non-drug assets has helped Bristol-Myers build a nice $9.9 billion war chest. Not as much cash and equivalents as Apple (Nasdaq: AAPL  ) or Google (Nasdaq: GOOG  ) , maybe, but remember this is only a $47 billion company -- considerably smaller than either of those two cash hoarders.

And, at least for now, it's continuing to throw off more cash. Bristol-Myers and marketing partner sanofi-aventis (NYSE: SNY  ) sell blood thinner Plavix, the world's second-largest drug behind Pfizer's (NYSE: PFE  ) Lipitor, and sales are continuing to grow -- up 10% year over year in the fourth quarter to $1.6 billion. Its other major blockbuster, antipsychotic and depression treatment Abilify, grew 17% in the last quarter to $707 million.

Those sales will come crashing down when Plavix and Abilify go off patent in the coming years, but for now, Bristol-Myers seems to be enjoying the substantial increases in earnings. Earnings from continuing operations (that is, without Mead Johnson) were up 21% for the year.

Now what to do with all that cash? Grab late-stage drugs that will help deaden the loss of those blockbusters? Or not worry about the crash and go for cheaper early stage compounds? Both, says management. "Deals that can build our late stage pipeline in 2011-2012 and deals that can be accretive [to earnings] in 2012-2013 ... after the loss of exclusivity of Plavix and Avapro," said Lamberto Andreotti, Bristol-Myers president.

Before jumping in, however, remember that investing in Bristol-Myers isn't without risk. Just like Eli Lilly's (NYSE: LLY  ) patent troubles, Bristol-Myers is dependent on its pipeline to bail it out. But Bristol-Myers has a larger wad of cash to help make that happen. Cash is king -- always has been, always will be.

Pfizer is a Motley Fool Inside Value recommendation. Google is a Rule Breakers selection. Apple is a Stock Advisor pick. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

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