Bristol-Myers Squibb announces changes
Chairman hoping
to reverse recent
performance problems
NORTH BRUNSWICK — Peter R. Dolan, chairman and chief executive officer of Bristol-Myers Squibb Co., announced that the group plans to make changes because of the company’s current poor performance.
"The company’s current business performance is unacceptable, and I am taking steps today, and may take additional actions in the future as necessary, to strengthen our organizational structure, focus our priorities, and accelerate our future growth," Dolan said in an April 4 press release.
The company decided to take action after experiencing a recent downturn in the stock market.
"I recognize that today’s announcement may have a negative impact on our results in the short term, but it is absolutely necessary that we take concrete steps today in order to position Bristol-Myers Squibb for the long term. We have a proud history as a leader in the pharmaceutical industry, and I will take necessary steps to assure that we maintain and build upon this heritage," Dolan said."
The first quarter of 2002 showed a weaker performance than the group had anticipated.
Dolan also said that he will be launching a number of initiatives intended to improve the company’s financial and operational performance, reduce costs and reset its growth track. These initiatives will begin immediately and focus on management and organizational changes, steps to reduce excess wholesaler inventory in the United States pharmaceuticals business and to promote future growth.
One of the big changes to Bristol-Myers will be in management, according to Dolan.
"Effective immediately, I am assuming direct responsibility for our global pharmaceuticals business, in addition to my other duties as chairman and CEO," Dolan said. "Both at the level of strategic planning and in daily execution, we need to do a better job, and I will personally lead this effort. I will be assisted by Donald J. Hayden, Jr., currently executive vice president, Health Care Group, who will now serve as executive vice president, Bristol-Myers Squibb, and president, North American Medicines. Richard J. Lane, president, Worldwide Medicines, will be leaving the company. Also, as was previously announced, Peter S. Ringrose, chief scientific officer, will report directly to me."
The company announced on April 16 that Harrison M. Bains, vice president, tax and treasury, will assume the post of acting chief financial officer. Dolan announced former CFO Fred Schiff is leaving the company and said there would be a search for a new financial officer.
Dolan said that he has confidence in the management changes.
"I have known and worked closely with Don Hayden for many years and have been consistently impressed with his extraordinary energy and deep knowledge of the pharmaceuticals business," Dolan said. "I know that he is held in similar regard within our organization and throughout our industry. I look forward to working closely with him, as well as with Peter Ringrose, to develop and implement our pharmaceutical strategies."
Another goal of Bristol-Myers will be resetting the first quarter of 2002 as well as the full year 2002 performance, according to Dolan.
"These management changes are clearly necessary in light of the company’s recent performance," Dolan said. "One aspect of this performance that must be addressed quickly is the company’s inventory management across its product portfolio in the United States pharmaceutical business."
Dolan also said he wanted to take advantage of the wholesaler inventory.
"Wholesaler inventory levels in the United States pharmaceutical business have increased over time," Dolan said. "As was previously advised, the company believes that current wholesaler inventory levels significantly exceed levels the company considers desirable on a going-forward basis, and it has begun to reduce shipments in an attempt to lower inventories to levels more consistent with market demand.
"I have taken a hard look at our business and have concluded that we must improve our current operating performance, our cost structure, and our focus on bringing great drugs to the market," Dolan said.
The company has been working closely with an investigational treatment for an advanced form of cancer. Dolan said he hopes to continue to develop ways through the clinical and regulatory process to keep things moving quickly and efficiently.
"We fully expected 2002 to be a transition year. The challenges we had anticipated have been compounded by business and organizational issues that we have identified and which are now being addressed in a fundamental and comprehensive fashion. I am confident that the successful implementation of the initiatives we have outlined today will result in a much stronger, healthier Bristol-Myers Squibb for the long term and for all concerned."