Bristol-Myers Squibb yesterday announced the departure of its Chief Executive Officer Peter Dolan with immediate effect, bringing to an abrupt end the intense speculation on his future that had been growing over the prior 24 hours. Senior Vice President and General Counsel Richard Willard has also left the firm.
Rumours of Dolan’s imminent departure were sparked by media reports that a federal monitor - former Judge Frederick Lacey – had recommended that Dolan and Willard should be fired. Judge Lacey has been investigating the firm’s conduct following a $2.5-billion accounting scandal at the firm, in which it was accused of oversupplying wholesalers with inventory in order to reach quarterly sales targets.
His recommendation comes in the wake of B-MS' disastrous pact with generic drugmaker Apotex, which was designed to keep a copycat version of the blood thinner Plavix (clopidogrel) off the market in the USA until September 2011. The ‘sweetheart’ deal was overturned by US regulators earlier this year, prompting Apotex to go ahead and launch its version anyway, with the terms of the deal allegedly providing the generics company with some protection against damages.
Although B-MS and partner Sanofi-Aventis eventually managed to win an injunction against the sale of the generic, Apotex had already flooded the market with its product, forcing both firms to significantly slash their 2006 earnings forecasts.
James Cornelius, a Director of the group since January last year, will take on the role of interim CEO until a permanent replacement is elected, while Sandra Leung becomes interim General Counsel.
Investors in the group seem to have taken a positive view of Dolan and Willard’s departure; after a day of frenzied trading on the New York Stock Exchange, shares closed up nearly 4% at $24.32.