Long-term investors are going to have to be happy with Bristol-Myers Squibb's (NYSE: BMY) fat dividend -- currently at 5.3% -- and hopefully some P/E inflation because earnings will essentially end up in 2013 about where they are today.







Actual or projected non-GAAP earnings
per share from operations





At least $1.95

Source: Company press releases.

At its investor conference yesterday, Bristol-Myers laid out its plan for the loss of $6.1 billion in revenue after it and marketing partner sanofi-aventis (NYSE: SNY) start to see generic competition in 2012 for Plavix.

Bristol -Myers needs each arm of its three-pronged approach to succeed in order to reach that goal.

The first one is easy: cut some costs. As long as it doesn't axe the research and development budget too much, getting leaner seems like a free source of profits for investors.

The second prong is to grow its newer drugs. The company wants to expand the use of leukemia drug Sprycel as a first-line treatment rather than being used after Novartis' (NYSE: NVS) Gleevec. Bristol-Myers also has high hopes for its diabetes drug Onglyza, which it markets with AstraZeneca (NYSE: AZN). That one will be a hard sell given that it's competing against entrenched leader Januvia from Merck (NYSE: MRK), but it can certainly grow sales higher than the $4 million it saw in the fourth quarter.

Finally Bristol-Myers expects to launch five new drugs by 2012, assuming the regulatory authorities agree. The biggest of the group might be cancer drug ipilimumab, which Bristol-Myers owns the full rights to after acquiring Medarex. Yesterday the company said it would seek approval this year for the drug to treat advanced melanoma and plans to start a trial testing the drug in lung cancer. Both are hard-to-treat indications, which could mean quick adoption by doctors.

If Bristol-Meyers can hit its target, I have a hard time seeing shares decrease much from here. Essentially investors are getting a bond -- with a yield higher than that of similarly situated Pfizer (NYSE: PFE) -- that comes with a call on future growth in 2014 and beyond.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value pick. Novartis is a Global Gains selection. The Fool has a disclosure policy.