After spinning off baby-formula maker Mead Johnson Nutrition
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
And, at least for now, it's continuing to throw off more cash. Bristol-Myers and marketing partner sanofi-aventis
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