Business at Bristol-Myers Squibb (NYSE:BMY) has become more interesting recently . and "interesting" is very rarely a good thing. It's far preferable to sell your drugs, make beaucoup cash flow, and go along on your merry way. But on the other hand, although Bristol-Myers is currently knee-deep in some challenges, that doesn't automatically spell doom for the pharma.

That said, fourth-quarter results weren't exactly great, either. Total sales fell by about 3% from the year-ago period, and pharmaceutical sales dropped by a like amount. Simply put, double-digit growth from a stable of drugs including Plavix, Abilify, Reyataz, and Erbitux weren't enough to outweigh losses to competition and generics -- as seen in cases like Pravachol's 18% drop. Net income, once adjusted for charges and items in both years, was also down about 23% from last year's level.

Unfortunately, things are likely to get worse before they get better. By the company's own estimation, it will lose more than another $1 billion in sales in 2006 to generic competition for drugs such as Pravachol, Taxol, and Cefzil. That's why losing out on promising diabetes-treatment drug Pargluva -- on which it once had a partnership with Merck (NYSE:MRK) -- stings all the more. Bristol-Myers certainly has some promising drugs, including some interesting anti-cancer compounds, but things probably aren't going to turn around until 2007.

And, of course, there's always the risk that even more things will go wrong. Plavix is facing a patent challenge, the company is a little bit behind Merck and Novartis (NYSE:NVS) in developing a new class of diabetes drug, and there's always the risk of trial failures and/or setbacks from the Food and Drug Administration.

Still, the dividend here is attractive, and the company is already in the process of reducing its cost base -- a move that Pfizer (NYSE:PFE) started a little while ago. It's true that you can't cost-cut your way to prosperity, but if trimming costs while waiting for the pipeline to mature and become productive helps preserve the dividend, so much the better. I can't honestly say that I'm a big fan of the stock, but I can understand why long-term investors might be willing to hold on and see how things work out.

For more Foolishness from the medicine cabinet:

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).