Bristol-Myers Squibb has given details of its future growth plans which it hopes will push earnings up by 15% annually through 2010, though 4,300 jobs and over half of its manufacturing facilities are going to be lost in the bargain.

At the meeting with investors in New York, the firm outlined its plan to transform itself into a “next-generation biopharma company that pairs the scale and resources of a mid-sized pharmaceutical company with the entrepreneurial spirit and innovative focus of a biotech start-up”. It intends to achieve this by embarking on a major restructuring programme.

B-MS says that over 300 initiatives have been identified “that will enhance the company's efficiency, effectiveness and competitiveness and substantially improve its cost base”. The major features of this programme will be to eliminate 10% of its work force and close “more than 50%” of its 27 manufacturing facilities over the next three years, resulting in new cost savings of $1.5 billion.

That $1.5 billion figure would be on top of previously-announced savings of $500 million by the end of 2007 and $100 million by the end of 2008 from other initiatives. However the group will incur pretax expenses of $900 million to $1.1 billion associated with the restructuring.

Chief executive James Cornelius said that “right-sizing our workforce across all areas is critical to achieving our productivity goals and enhancing the competitive position of the company”. He added that while we are reducing headcount in certain functions, we will continue to invest in R&D, biologics and commercialisation talent".

B-MS also said it is planning to reducing the number of brands in its “mature products” portfolio by 60% between now and 2011, the year when the company will suffer patent loss on its $5 billion-a-year antithrombotic blockbuster Plavix (clopidogrel). The new products currently in the pipeline that B-MS hopes will help soften that considerable blow include developmental diabetes compounds saxagliptin and dapagliflozin, being developed with AstraZeneca, the cancer drug ipilimumab and the biologic compound belatacept, which is under development “to replace cornerstone therapy in solid organ transplantation”.

ConvaTec, Mead Johnson may be sold off
Further cash injections will come from the sale of B-MS’ imaging business and Mr Cornelius said it is reviewing “strategic alternatives” for its ConvaTec wound healing unit and Mead Johnson nutritionals division. Analysts value the latter two units combined at around $13 billion.

At the New York meeting, B-MS raised its 2008 earnings per share forecast, excluding special items, to $1.65-$1.75 from $1.60 -$1.70, which would represent a 19% increase on this year’s expected EPS. Analysts were impressed with the figures and the restructuring plans and Barbara Ryan at Deutsche Bank said that the firm “is on track to report stellar growth, which should far exceed many of its peers, as well as the market overall".