On Monday, Bristol-Myers Squibb
Mead Johnson Nutrition sells baby formula, including Enfamil, and supplements for pregnant and nursing moms. Sales clocked in at $2.48 billion last year, making up about 13% of Bristol-Myers' sales.
It plans to keep 80% to 90% of the shares from the IPO, so it'll still be in full control of the business. That's in stark contrast to how it handled its medical-imaging and wound care businesses -- those were completely sold in recent months.
Different pharmaceutical companies have taken different paths to dealing with their coming patent cliffs. Like Bristol-Myers, Pfizer
One thing is for certain: Bristol-Myers could use the cash. From its small purchases of Kosan Biosciences and Adnexus Therapeutics to its $60 per share offer for ImClone Systems
A partial spin-off IPO of the baby and infant product line is a reasonable plan, assuming the market wants to buy the shares. It allows Bristol-Myers the flexibility to sell further portions at a later time to raise more cash if needed. It might even be able to sell the shares at a premium either now or later. What's more recession-proof than baby formula?
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