Bristol-Myers Squibb Company

345 Park Avenue
New York, New York 10154
U.S.A.
(212) 546-4000
Fax: (212) 546-4020

Public Company
Incorporated: 1900 as Bristol-Myers Company
Employees: 54,100
Sales: $9.19 billion
Stock Exchange: New York

During the late 1980s, competitive pressure and the increasing cost of research led many pharmaceutical firms to seek business partners in order to survive. One such combination united Bristol-Myers Company and the Squibb Corporation, two large and successful firms with compatible operations. The merger created the second largest pharmaceutical company in the world. Bristol-Myers Squibb Company is also recognized worldwide as a major producer and distributor of consumer products like toothpaste and drain opener.

Bristol-Myers was founded in 1887 by two former fraternity brothers, William McLaren Bristol and John Ripley Myers. They each invested $5,000 in a failing Clinton, New York-based drug manufacturer, the Clinton Pharmaceutical Company, and their one-man sales force began selling medical preparations by horse and buggy to local doctors and dentists. For the first few years the company struggled due to insufficient capital and the new owners’ lack of understanding of how drugs were made. The firm relocated from Clinton to Syracuse, New York, in 1889 to improve its shipping capability, and then moved again, ten years later, to Brooklyn in order to be more accessible to its expanding base of customers in Pennsylvania and New England.

In 1898 the company’s name was changed to Bristol, Myers Company. One year later John Ripley Myers died. To help the company grow, the firm increased its sales force, referred to as “detail men,” and began shifting its attention from physicians to wholesale and retail druggists who were now recognized as primary suppliers of medication.

In 1900 the firm incorporated and modified its name, replacing the comma with a hyphen. The same year, BristolMyers Company made its first profit and entered the market for specialty products. Sales of such Bristol-Myers items as Sal Hepatica, a laxative mineral salt, and Ipana toothpaste, the first such product to contain a disinfectant, grew rapidly between 1903 and 1905. Strong demand caused a number of changes in the company’s operation, including the creation of an export department to handle international orders and the opening of new manufacturing facilities in Hillside, New Jersey.

In 1915 Henry Bristol, William Bristol’s oldest son, became general manager. Henry Bristol was joined in 1928 by his brothers, William Jr. and Lee, who handled manufacturing and advertising, respectively. During the recession that followed World War I the company discontinued its line of “ethical,” or prescription drugs to focus production on its two best-selling specialty products and other toiletries, antiseptics, and cough syrups. Bristol-Myers also moved to its present location in Manhattan at this time. The shift in product focus was accompanied by a new emphasis on advertising, but to consumers rather than to doctors and dentists. Bristol-Myers sponsored a radio show featuring a group called the Ipana Troubadours, and introduced the slogan “Ipana for the Smile of Beauty; Sal Hepatica for the Smile of Health.”

The company became a part of Drug, Inc., a large, newly formed holding company, in 1928. Drug, Inc., produced proprietary drugs and other medications and also operated a large retail chain. Bristol-Myers continued to grow and advertised heavily during the Great Depression, launching a number of new and successful consumer products. Other operations affiliated with Drug, Inc., did not fare nearly as well, however, and the holding company disbanded in 1933.

Upon the outbreak of World War II, Bristol-Myers again became a manufacturer of ethical pharmaceuticals. It mass produced penicillin for the Allied armed forces through its Bristol Laboratories subsidiary, which had been previously acquired under the name of Cheplin Laboratories. Bristol Laboratories’ experience in the process of fermentation— which was required to make its primary product, acidophilus milk—was easily converted to the manufacture of the antibiotics. This led to the firm’s formal re-entry into the ethical drug area and enabled it to take advantage of the growing demand for antibiotics after the war

The company continued to grow over the next decade, assisted by television advertisements. In 1957 Henry Bristol became chairman of the board and was succeeded as president and chief executive officer by Fredric N. Schwartz, the former head of Bristol Laboratories. Assisted by Gavin K. MacBain, the company’s treasurer who later assumed the position of chairman, Schwartz acquired a number of smaller, well-managed companies in growing industries. The new subsidiaries grew quickly with help from Bristol-Myers’s research and marketing expertise. These acquisitions included Clairol, a maker of hair-coloring products, purchased in 1959; Drackett, a household-products manufacturer, acquired in 1965; and Mead Johnson, which produced infant formula and children’s vitamins, purchased in 1967. Clairol had already made marketing history as a result of the popular “Does she or doesn’t she? Hair color so natural only her hairdresser knows for sure!” advertising campaign.

Richard Gelb, the son of Clairol’s founder, reluctantly joined Bristol-Myers after the acquisition to head the Clairol operation. Gelb was given a wide berth in managing Clairol and did so well that he was promoted to executive vice president and then to president under chairman Gavin MacBain. Gelb became president just as Bristol-Myers’s growth flattened out. A string of new-product failures during the late 1960s drained finances and depressed stock value. In 1972 Gelb was appointed chairman and CEO. He initiated a comeback over the next decade by spending $400 million advertising the company’s most popular brands and by expanding its line of health-care products. This growth was accomplished in part through the acquisitions of Zimmer Manufacturing Company, a producer of orthopedic and surgical products, in 1972, and of Unitek Corporation, a dental-equipment supplier, in 1978.

Under Gelb’s leadership, Bristol-Myers was able to shift gears quickly in response to market changes. When concern over the use of fluorocarbons threatened the spray-deodorant market in the mid-1970s, the company increased advertising of its Ban roll-on deodorant. This strategy vaulted Ban into the top-selling spot and increased the sales of all other roll-on products by 75% in one year.

Soon afterward, however, the company suffered a major marketing setback with its Clairol products. In 1977 the National Cancer Institute reported a link between an ingredient used in hair colorants, 2-4 DAA, and cancer in laboratory rats. Bristol-Myers disputed these findings at first but later introduced a new line of hair-coloring products and reformulated the original line without the ingredient in question.

Bristol-Myers’s continued attention to health-care research was also a major factor in its resurgence. Beginning in the late 1970s Bristol-Myers began to use cash generated by its consumer-products business to fund the research and development of additional drugs beyond its antibiotics and synthetic penicillins. A number of new areas were explored, including cardiovascular agents and anticancer drugs.

At the time, Bristol-Myers was the only pharmaceutical company to invest in anticancer drugs, because growth potential appeared small. The company obtained the marketing rights to several anticancer drugs developed by the National Institutes of Health and other research institutions, universities, and drug companies, and was well positioned when this market took off. Between 1974 and 1980 Bristol-Myers launched 11 new drugs for treatment of cancer and other diseases. Although none of these products was a breakthrough drug, they contributed over $200 million in sales to the company by 1980. This growth occurred despite the company’s relatively small research budget.

The company was already an experienced marketer of over-the-counter (OTC) analgesics. Its Excedrin and Bufferin brands had accounted for one-quarter of the total market for nonprescription pain relievers until the early 1960s, when an OTC version of Johnson & Johnson’s Tylenol—a nonaspirin product—took a significant percentage of Bristol-Myers’s market share. In the mid-1970s Bristol-Myers challenged Johnson & Johnson with Datril, a nonaspirin product priced lower than Tylenol. Johnson & Johnson responded quickly, lowering the price of Tylenol.

In 1981 the company settled a series of ten-year-old antitrust suits alleging that Bristol-Myers and Beecham Group, a British pharmaceutical company, had improperly obtained a patent on the antibiotic ampicillin. The suits also accused the firms of engaging in restrictive licensing practices which had resulted in excessive charges to hospitals, wholesalers, and retailers.

The following year a series of product-tampering incidents occurred involving various over-the-counter analgesic products, including Bristol-Myers’s Excedrin capsules. The company responded to new Food and Drug Administration (FDA) regulations in 1983 with tamper-resistant packaging for its capsule products.

In 1984 Bristol-Myers signed an agreement with Upjohn which enabled it to introduce Nuprin, a new nonprescription form of ibuprofen pain reliever. The agreement gave Bristol-Myers the means to take on Tylenol once again. It also pitted the firm against American Home Products, which already sold a pain reliever under the Anacin brand and was planning to launch a new ibuprofen-based product called Advil.

At this time, Bristol-Myers entered the market for drugs used to treat anxiety and depression. The company licensed the rights to products manufactured by foreign firms while continuing to invest heavily in its own pharmaceutical research and development. The firm had reorganized its internal research operations and, in 1984, built a multi-million dollar research facility in Wallingford, Connecticut. Two years later Bristol-Myers received FDA approval to market its own tranquilizer product, BuSpar, which did not produce many of the negative side effects of other antidepressant drugs already on the market.

In 1986 the firm became enmeshed in the complex acquisition of Genetic Systems Corporation (GSC), a Seattle, Washington-based biotechnology company. GSC was founded in 1980 by a group of entrepreneurial microbiologists who teamed up with Syntex Corporation, a drug company, to manufacture and market tests for sexually transmitted diseases. Three years later the partners formed another venture, Oncogen, to manufacture products for cancer treatment, and in 1985 they offered Bristol-Myers an opportunity to invest in the operation. Later that year, after a Bristol-Myers competitor, Eli Lilly & Company, acquired Hybridtech, a leading producer of monoclonal antibodies, Bristol-Myers negotiated an agreement with GSC management to buy GSC and Oncogen, unaware that GSC had negotiated a similar deal with Syntex two months before. After threatening a lawsuit, Syntex elected to withdraw its offer for GSC in exchange for a $15 million compensation package provided by Bristol-Myers and for marketing rights to selected GSC and Oncogen products. Bristol-Myers sold GSC to Sanofi, a French pharmaceutical firm, in 1990.

In June 1986 a second incident of tampering with capsule-type pain-relief products caused two deaths in the Seattle area. This incident led Bristol-Myers to recall its Excedrin capsules nationwide. It soon withdrew all of its nonprescription capsule products from the market, including Comtrex cold-relief medication. The capsules were replaced with the caplet, a specially coated, capsule-shaped pill. With this action, Bristol-Myers became the second company in its industry, after Johnson & Johnson, to end the sale of OTC medication in capsule form.

In an attempt to establish a stronger position in the field of coronary care, Bristol-Myers negotiated an agreement in March 1987 to acquire SciMed Life Systems, a manufacturer of coronary balloon angioplasty catheters and other disposable products for treating cardiovascular disease. Two months later Bristol-Myers withdrew its offer after SciMed was sued by Eli Lilly & Company for patent infringement.

Bristol-Myers continued to grow as a manufacturer of prescription pharmaceuticals and to lessen its dependence on consumer products by focusing on acquired immune deficiency syndrome (AIDS) research. Since both cancer and AIDS research are virology-based, this area was a natural fit for the company. In 1987 Bristol-Myers obtained an exclusive license to produce and test two new AIDS drugs, dideoxyadenosine (DDA) and dideoxyinosine (DDI). It also received FDA approval to test an experimental AIDS vaccine on humans.

In November 1989 Bristol-Myers merged with Squibb Corporation. Squibb had been established in 1858 and was among the oldest U.S. pharmaceutical companies. Over half of Squibb’s sales were generated by pharmaceuticals, and the company also owned a profitable cosmetic business. The two firms had similar corporate cultures. The merger also brought together two chief executives, Gelb and Richard M. Furlaud of Squibb, who had been friends for 25 years and had discussed the idea of a merger occasionally over the previous three years.

As part of the merger agreement Richard Gelb became chairman and chief executive officer of the combined company, while Furlaud, his counterpart at Squibb, became president and headed up the company’s pharmaceutical business. Squibb benefited from Bristol-Myers’s biomedical research capabilities and established presence in consumer health products. This market was becoming increasingly important to Squibb, since several competitors were already negotiating agreements to market their prescription drugs in OTC forms to consumers. In Squibb, Bristol-Myers obtained a new source of prescription drugs with strong sales potential, particularly in the cardiovascular area, and a sizable budget to add to its own continuing-research operation.

Bristol-Myers Squibb Company is comprised of four major product areas with significant global growth potential: pharmaceuticals, consumer products, medical devices, and nutritionals. The company’s pharmaceutical products include cardiovascular and anticancer drugs, anti-infective agents, drugs for treating the central nervous system, diagnostic imaging agents, and dermatological products which are marketed through the company’s Westwood Pharmaceuticals subsidiary. As the population ages and health-care costs continue to increase, Bristol-Myers Squibb’s goals is to develop new pharmaceutical products which will reduce hospitalization and keep health-care expenses down.

The company currently markets over 140 consumer brands, including nonprescription medicines, vitamins, skin-care preparations, toiletries, beauty aids, and household-care items. Its medical-devices division serves the orthopedics market with such products as artificial hip and knee replacements, and also supplies various items needed for ostomy procedures, wound and burn care, and other surgical specialties.

The second-largest maker of infant formula in the world, Bristol-Myers Squibb Company also manufactures products for people of all ages requiring nutritional support. In 1989 the company negotiated an agreement with Gerber Products Company to manufacture and market Gerber Baby Formula directly to U.S. consumers. Controversial advertising for this product touched off a boycott of the company’s line of formula products by a group of pediatricians who felt that Bristol-Myers Squibb was attempting to discourage breastfeeding and to compromise the physician’s influence in baby formula selection.

The future of Bristol-Myers Squibb Company is dependent upon continued product leadership on an international basis in each of its highly competitive core businesses, as well as a continuing commitment to research and development of new products. Several forces—including an aging population, an increasing percentage of women in the full-time workforce, and a growing number of nontraditional households—are expected to create needs which will have a strong influence on the company’s consumer-products business.

Further Reading

Bristol-Myers Company Special Report: The Next Century, New York, Bristol-Myers Company, 1987; “Squibb Corporation,” in International Directory of Company Histories, Volume I, edited by Thomas Derdak, Chicago, St. James Press, 1988.

—Sandy Schusteff

Bristol-Myers Squibb Company

345 Park Avenue
New York, New York, 10154
U.S.A.
(212) 546-4000
Fax: (212) 546-4020

Public Company
Incorporated: 1900 as Bristol-Myers Company
Employees: 52,600
Sales: $11 billion
Stock Exchanges: New York
SICs: 2834 Pharmaceutical Preparations; 2844 Perfumes, Cosmetics

Bristol-Myers Squibb Company is the second largest pharmaceutical company in the world and is also recognized worldwide as a major producer and distributor of such consumer products as toothpaste and drain opener. The merger between Bristol-Myers Company and the Squibb Corporation, two large and successful firms with compatible operations, occurred during the late 1980s, when competitive pressure and the increasing cost of research led many pharmaceutical firms to seek business partners in order to survive.

Bristol-Myers was founded in 1887 by two former fraternity brothers, William McLaren Bristol and John Ripley Myers. They each invested $5,000 in the Clinton Pharmaceutical Company, a failing drug manufacturer based in New York, and their small operation began selling medical preparations by horse and buggy to local doctors and dentists. For the first few years the company struggled due to insufficient capital and the new owners’ lack of understanding of how drugs were made. The firm relocated from Clinton to Syracuse, New York, in 1889 to improve its shipping capability, and then moved again, ten years later, to Brooklyn for easier access to its expanding base of customers in Pennsylvania and New England.

In 1898 the company’s name was changed to Bristol, Myers Company. One year later John Ripley Myers died. To help the company grow, the firm increased its sales force, referred to as “detail men,” and began shifting its attention from physicians to wholesale and retail druggists who were now recognized as primary suppliers of medication.

In 1900 the firm incorporated and modified its name, replacing the comma with a hyphen. The same year, Bristol-Myers Company made its first profit and entered the market for specialty products. Sales of such Bristol-Myers items as Sal Hepatica, a laxative mineral salt, and Ipana toothpaste, the first such product to contain a disinfectant, grew rapidly between 1903 and 1905. Strong demand caused several changes in the company’s operation, including the creation of an export department to handle international orders and the opening of new manufacturing facilities in Hillside, New Jersey.

In 1915 Henry Bristol, William Bristol’s oldest son, became general manager. Henry was joined in 1928 by his brothers, William Jr. and Lee, who handled manufacturing and advertising, respectively. During the recession that followed World War I the company discontinued its line of “ethical,” or prescription, drugs to focus production on its two best-selling specialty products and other toiletries, antiseptics, and cough syrups. Bristol-Myers also moved to its present location in Manhattan at this time. The shift in product focus was accompanied by a new emphasis on advertising directed toward consumers rather than doctors and dentists. Bristol-Myers sponsored a radio show featuring a group called the Ipana Troubadours, and introduced the slogan “Ipana for the Smile of Beauty; Sal Hepatica for the Smile of Health.”

The company became a part of Drug, Inc., a large, newly formed holding company, in 1928. Drug, Inc., produced proprietary drugs and other medications and also operated a large retail chain. Bristol-Myers continued to grow and advertised heavily during the Great Depression, launching several new and successful consumer products. Other operations affiliated with Drug, Inc., did not fare nearly as well, however, and the holding company disbanded in 1933.

Upon the outbreak of World War II, Bristol-Myers again became a manufacturer of ethical Pharmaceuticals. It mass produced penicillin for the Allied armed forces through its Bristol Laboratories subsidiary, which had been previously acquired under the name of Cheplin Laboratories. Bristol Laboratories’ experience in the process of fermentation—which was required to make its primary product, acidophilus milk—was easily converted to the manufacture of the antibiotics. This led to the firm’s formal re-entry into the ethical drug area and enabled it to take advantage of the growing demand for antibiotics after the war.

The company continued to grow over the next decade, assisted by television advertisements. In 1957 Henry Bristol became chair of the board and was succeeded as president and chief executive officer by Fredric N. Schwartz, the former head of Bristol Laboratories. Assisted by Gavin K. MacBain, the company’s treasurer who later assumed the position of chairperson, Schwartz acquired several smaller, well-managed companies in growing industries. The new subsidiaries grew quickly with help from Bristol-Myers’s research and marketing expertise. These acquisitions included Clairol, a maker of hair coloring products, purchased in 1959; Drackett, a household products manufacturer, acquired in 1965; and Mead Johnson, which produced infant formula and children’s vitamins, purchased in 1967. Clairol had already made marketing history as a result of the popular advertising campaign “Does she or doesn’t she? Hair color so natural only her hairdresser knows for sure!”

Richard Gelb, the son of Clairol’s founder, reluctantly joined Bristol-Myers after the acquisition to head the Clairol operation. Gelb was given a wide berth in managing Clairol and did so well that he was promoted to executive vice-president and then to president under chairman Gavin MacBain. Gelb became president just as Bristol-Myers’s growth flattened out. A string of new-product failures during the late 1960s drained finances and depressed stock value. In 1972 Gelb was appointed chair and CEO. He initiated a comeback over the next decade by spending $400 million advertising the company’s most popular brands and by expanding its line of health care products. This growth was accomplished in part through the acquisitions of Zimmer Manufacturing Company, a producer of orthopedic and surgical products, in 1972, and of Unitek Corporation, a dental equipment supplier, in 1978.

Under Gelb’s leadership, Bristol-Myers was able to shift gears quickly in response to market changes. When concern over the use of fluorocarbons threatened the spray deodorant market in the mid-1970s, the company increased advertising of its Ban roll-on deodorant. This strategy vaulted Ban into the top-selling spot and increased the sales of all other roll-on products by 75 percent in one year.

Soon thereafter, however, the company suffered a major marketing setback with its Clairol products. In 1977 the National Cancer Institute reported a link between an ingredient used in hair colorants, 2-4 DA A, and cancer in laboratory animals. Bristol-Myers disputed these findings at first but later introduced a new line of hair coloring products and reformulated the original line without the ingredient in question.

Bristol-Myers’s continued attention to health-care research was also a major factor in its resurgence. Beginning in the late 1970s Bristol-Myers began to use cash generated by its consumer-products business to fund the research and development of additional drugs beyond its antibiotics and synthetic penicillins. Several new areas were explored, including cardiovascular agents and anticancer drugs.

At the time, Bristol-Myers was the only pharmaceutical company to invest in anticancer drugs, because growth potential appeared small. The company obtained the marketing rights to several anticancer drugs developed by the National Institutes of Health and other research institutions, universities, and drug companies, and was well positioned when this market took off. Between 1974 and 1980 Bristol-Myers launched 11 new drugs for treatment of cancer and other diseases. Although none of these products was a breakthrough drug, combined they contributed over $200 million in sales to the company by 1980. This growth occurred despite the company’s relatively small research budget.

The company was already an experienced marketer of over-the-counter (OTC) analgesics. Its Excedrin and Bufferin brands had accounted for one-quarter of the total market for non-prescription pain relievers until the early 1960s, when an OTC version of Johnson & Johnson’s Tylenol—a nonaspirin product—took a significant percentage of Bristol-Myers’s market share. In the mid-1970s Bristol-Myers challenged Johnson & Johnson with Datril, a nonaspirin product priced lower than Tylenol. Johnson & Johnson responded quickly, lowering the price of Tylenol.

In 1981 the company settled a series of ten-year-old antitrust suits alleging that Bristol-Myers and Beecham Group, a British pharmaceutical company, had improperly obtained a patent on the antibiotic ampicillin. The suits also accused the firms of engaging in restrictive licensing practices, which had resulted in excessive charges to hospitals, wholesalers, and retailers.

The following year a series of product tampering incidents occurred involving various over-the-counter analgesic products, including Bristol-Myers’s Excedrin capsules. The company responded to new Food and Drug Administration (FDA) regulations in 1983 with tamper resistant packaging for its capsule products.

In 1984 Bristol-Myers signed an agreement with Upjohn which enabled it to introduce Nuprin, a new nonprescription form of ibuprofen pain reliever. The agreement gave Bristol-Myers the means to take on Tylenol once again. It also pitted the firm against American Home Products, which already sold a pain reliever under the Anacin brand and was planning to launch a new ibuprofen-based product called Advil.

At this time, Bristol-Myers entered the market for drugs used to treat anxiety and depression. The company licensed the rights to products manufactured by foreign firms while continuing to invest heavily in its own pharmaceutical research and development. The firm had reorganized its internal research operations and, in 1984, built a multimillion dollar research facility in Wallingford, Connecticut. Two years later Bristol-Myers received FDA approval to market its own tranquilizer product, BuSpar, which did not produce many of the negative side effects of other antidepressant drugs already on the market.

In 1986 the firm became enmeshed in the complex acquisition of Genetic Systems Corporation (GSC), a Seattle-based biotechnology company. GSC was founded in 1980 by a group of entrepreneurial microbiologists who teamed up with Syntex Corporation, a drug company, to manufacture and market tests for sexually transmitted diseases. Three years later the partners formed another venture, Oncogen, to manufacture products for cancer treatment, and in 1985 they offered Bristol-Myers an opportunity to invest in the operation. Later that year, after a Bristol-Myers competitor, Eli Lilly & Company, acquired Hybridtech, a leading producer of monoclonal antibodies, Bristol-Myers negotiated an agreement with GSC management to buy GSC and Oncogen, unaware that GSC had negotiated a similar deal with Syntex two months before. After threatening a lawsuit, Syntex elected to withdraw its offer for GSC in exchange for a $15 million compensation package provided by Bristol-Myers and for marketing rights to selected GSC and Oncogen products. Bristol-Myers sold GSC to Sanofi, a French pharmaceutical firm, in 1990.

In June 1986 a second incident of tampering with capsule-type pain relief products caused two deaths in the Seattle area. This incident led Bristol-Myers to recall its Excedrin capsules nationwide. It soon withdrew all of its nonprescription capsule products from the market, including Comtrex cold relief medication. The capsules were replaced with the caplet, a specially coated, capsule-shaped pill. With this action, Bristol-Myers became the second company in its industry, after Johnson & Johnson, to end the sale of OTC medication in capsule form.

In an attempt to establish a stronger position in the field of coronary care, Bristol-Myers negotiated an agreement in March 1987 to acquire SciMed Life Systems, a manufacturer of coronary balloon angioplasty catheters and other disposable products for treating cardiovascular disease. Two months later Bristol-Myers withdrew its offer after SciMed was sued by Eli Lilly & Company for patent infringement.

Bristol-Myers continued to grow as a manufacturer of prescription Pharmaceuticals, lessening its dependence on consumer products by focusing on acquired immune deficiency syndrome (AIDS) research. Since both cancer and AIDS research are virology-based, this area was a natural fit for the company. In 1987 Bristol-Myers obtained an exclusive license to produce and test two new AIDS drugs, dideoxyadenosine (DDA) and dideoxyinosine (DDI). It also received FDA approval to test an experimental AIDS vaccine on humans.

In November 1989 Bristol-Myers merged with Squibb Corporation. Squibb had been established in 1858 and was among the oldest U.S. pharmaceutical companies. Over half of Squibb’s sales were generated by Pharmaceuticals, and the company also owned a profitable cosmetic business. The two firms had similar corporate cultures. The merger also brought together two chief executives, Gelb and Richard M. Furlaud of Squibb, who had been friends for 25 years and had discussed the idea of a merger occasionally over the previous three years.

As part of the merger agreement Richard Gelb became chairman and chief executive officer of the combined company, while Furlaud, his counterpart at Squibb, became president and headed up the company’s pharmaceutical business. Squibb benefited from Bristol-Myers’s biomedical research capabilities and established presence in consumer health products. This market was becoming increasingly important to Squibb, since several competitors were already negotiating agreements to market their prescription drugs in OTC forms to consumers. In Squibb, Bristol-Myers obtained a new source of prescription drugs with strong sales potential, particularly in the cardiovascular area, and a sizable budget to add to its own continuing research operation.

The merger, which united the twelfth and fourteenth largest companies, was not without tension. By December 1990, 2,000 employees—four percent of the total workforce—had been laid off, and Bristol planned to close 60 pharmaceutical plants worldwide. Closings of six of 18 consumer products plants were scheduled through 1993. Nevertheless, the merger gave Bristol an important worldwide presence, thanks to Squibb’s strong position in Europe, the world’s largest drug market.

Bristol-Myers Squibb Company is comprised of four major product areas with significant global growth potential: pharma-ceuticals, consumer products, medical devices, and nutritionals. The company’s pharmaceutical products include cardiovascular and anticancer drugs, anti-infective agents, drugs for treating the central nervous system, diagnostic imaging agents, and dermatological products which are marketed through the company’s Westwood Pharmaceuticals subsidiary. As the population ages and health care costs continue to increase, Bristol-Myers Squibb’s goal is to develop new pharmaceutical products that will reduce hospitalization and keep health care expenses down.

The company markets over 140 consumer brands, including nonprescription medicines, vitamins, skin care preparations, toiletries, beauty aids, and household items. Its medical devices division serves the orthopedics market with such products as artificial hip and knee replacements, and also supplies various items needed for ostomy procedures, wound and burn care, and other surgical specialties.

The second-largest maker of infant formula in the world, Bristol-Myers Squibb Company also manufactures products for people of all ages requiring nutritional support. In 1989 the company negotiated an agreement with Gerber Products Company to manufacture and market Gerber Baby Formula directly to U.S. consumers. Controversial advertising for this product touched off a boycott of the company’s line of formula products by a group of pediatricians who felt that Bristol-Myers Squibb was attempting to discourage breastfeeding and to compromise physicians’ influence in baby formula selection.

As it entered the 1990s, Bristol-Myers Squibb’s goal was to achieve the top spot in world pharmaceutical sales by the year 2001. The company received FDA approval for its cholesterol-lowering drug, Pravachol, in 1991. Company executives predicted that Pravachol, which helps offset the effects of heart disease and allows some patients to forego surgery, would become a billion dollar drug.

Bristol-Myers Squibb also had several other drugs in various stages of development. One important and promising drug in development was Videx, used to fight AIDS. Another important development was Taxol, an anticancer drug made from the bark of the Pacific yew tree. The FDA gave the company the go-ahead in early 1993 to market Taxol to ovarian cancer patients. However, in February 1993, the U.S. Subcommittee on Regulation, Business Opportunities, and Energy accused Bristol-Myers Squibb and several other pharmaceutical companies of overpricing, pointing to Taxol’s price of six to eight thousand dollars per complete treatment. However, the company maintained that the price was not excessive, and declined to supply the subcommittee with the data used to set the price.

By the end of the first quarter of 1993, sales at Bristol-Myers Squibb had increased four percent or $2.8 billion. During that quarter, two committees of the U.S. Food and Drug Administration gave the go-ahead to new uses of two of the company’s existing products: Capoten, for use by patients who had suffered a heart attack, and Megace, for treatment of anorexia and HIV-related weight loss. At the same time, generic drug makers began working on a non-branded version of Capoten, whose patent is due to expire in 1995.

In January 1993, Bristol signed a contract with Mead Johnson, establishing a joint venture to produce and sell Enfamil and Enfapro infant formulas in Guangzhou, China. Nevertheless, the main focus of research at Bristol-Myers Squibb remains in anti-cancer drugs. Company scientists seek to develop drugs that will kill cancerous cells with fewer side effects in the patient.

The future of Bristol-Myers Squibb Company is dependent upon continued product leadership on an international basis in each of its highly competitive core businesses, as well as a continuing commitment to research and development of new products. Several forces—including an aging population, an increasing percentage of women in the full-time workforce, and a growing number of nontraditional households—are expected to create needs that will have a strong influence on the company’s consumer products business.

Further Reading

Bristol-Myers Company Special Report: The Next Century, New York: Bristol-Myers Company, 1987.

Bristol-Myers Squibb Company Annual Reports, New York: Bristol-Myers Squibb Co., 1988-92.

“Bristol-Myers Squibb Gets an Okay on Taxol,” Chemical Marketing Reporter, January 4, 1993, p. 3.

“Bristol-Myers Squibb Reports Results,” PR Newswire, April 21, 1993.

Hager, Bruce, “Marriage Becomes Bristol-Myers Squibb,” Business Week, December 3, 1990, pp. 138-39.

—Sandy Schusteff

updated by Marinell Landa

Bristol-Myers Squibb Company

345 Park Avenue
New York, New York 10154-0037
U.S.A.
Telephone: (212) 546-4000
Fax: (212) 546-4020
Web site: http://www.bms.com

Public Company
Incorporated: 1900 as Bristol-Myers Company
Employees: 54,500
Sales: $20.22 billion (1999)
Stock Exchanges: New York
Ticker Symbol: BMY
NAIC: 325412 Pharmaceutical Preparations Manufacturing; 32562 Toilet Preparations Manufacturing

Bristol-Myers Squibb Company is comprised of four core businesses: pharmaceuticals, consumer products, medical devices, and nutritional products. It is the third largest pharmaceutical company in the world, and its offerings include cardiovascular and anti-cancer drugs, anti-infective agents, drugs for treating the central nervous system, diagnostic imaging agents, and dermatological products. The consumer products division markets well-known brands such as Clairol and Excedrin, and the company’s medical devices division serves the orthopedics market with products such as artificial hip and knee replacements, while also supplying various items needed for ostomy procedures, wound and burn care, and other surgical specialties. The company came to be known as Bristol-Myers Squibb in the late 1980s, when Bristol-Myers Company and the Squibb Corporation merged. At that time, competitive pressure and the increasing cost of research led many pharmaceutical firms to seek business partners in order to survive.

The Early Years: 1887–1920

Bristol-Myers was originally founded in 1887 by two former fraternity brothers, William McLaren Bristol and John Ripley Myers. They each invested $5,000 in the Clinton Pharmaceutical Company—a failing drug manufacturer based in New York— and their small operation began selling medical preparations by horse and buggy to local doctors and dentists. For the first few years, the company struggled due to insufficient capital and the new owners’ lack of understanding of how drugs were made. The firm relocated from Clinton to Syracuse, New York in 1889 to improve its shipping capability, and then moved again ten years later to Brooklyn, New York for easier access to its expanding base of customers in Pennsylvania and New England.

In 1898, the company’s name was changed to Bristol, Myers Company. One year later, John Ripley Myers died. To help the company grow, the firm increased its sales force, referred to as “detail men,” and began shifting its attention from physicians to wholesale and retail druggists, who were increasingly being recognized as primary suppliers of medication.

In 1900, the firm incorporated and again modified its name, replacing the comma between Bristol and Myers with a hyphen. The same year, Bristol-Myers Company made its first profit, and entered the market for specialty products. Sales of such Bristol-Myers items as Sal Hepatica (a laxative mineral salt) and Ipana toothpaste (the first such product to contain a disinfectant) grew rapidly between 1903 and 1905.

Strong demand caused several changes in the company’s operation, including the creation of an export department to handle international orders, and the opening of new manufacturing facilities in Hillside, New Jersey. In 1915, Henry Bristol, William Bristol’s oldest son, became the company’s general manager. Henry was later joined in 1928 by his brothers, William Jr. and Lee, who handled manufacturing and advertising, respectively.

The 1920s to 1960s: Steady Growth and Acquisitions

During the recession that followed World War I, the company discontinued its line of “ethical,” or prescription, drugs to focus production instead on its two best-selling specialty products, as well as other toiletries, antiseptics, and cough syrups. It was then that Bristol-Myers also moved its offices to its present location in Manhattan. The shift in product focus was accompanied by a new emphasis on advertising directed toward consumers rather than doctors and dentists. Bristol-Myers sponsored a radio show featuring a group called the Ipana Troubadours, and introduced the slogan “Ipana for the Smile of Beauty; Sal Hepatica for the Smile of Health.”

In 1928, the company became a part of Drug, Inc., a large, newly formed holding company that produced proprietary drugs and other medications, while also operating a large retail chain. Bristol-Myers continued to grow and advertised heavily during the Great Depression, launching several new and successful consumer products. Other operations affiliated with Drug, Inc. did not fare nearly as well, however, and the holding company disbanded in 1933.

Upon the outbreak of World War II, Bristol-Myers again became a manufacturer of ethical Pharmaceuticals. It mass produced penicillin for the Allied armed forces through its Bristol Laboratories subsidiary, which had previously been acquired under the name of Cheplin Laboratories. Bristol Laboratories’ experience in the process of fermentation—which was required to make its primary product, acidophilus milk—was easily converted to the manufacture of the antibiotics. This led to the firm’s formal re-entry into the ethical drug arena, and enabled it to take advantage of the growing demand for antibiotics after the war.

The company continued to grow over the next decade, assisted by television advertisements. In 1957, Henry Bristol became chair of the board and was succeeded as president and chief executive officer by Fredric N. Schwartz, the former head of Bristol Laboratories. Assisted by Gavin K. MacBain, the company’s treasurer (who later assumed the position of chair-person), Schwartz acquired several smaller, well-managed companies in growing industries. The new subsidiaries grew quickly with help from Bristol-Myers’ research and marketing expertise. These acquisitions included Clairol, a maker of hair coloring products, purchased in 1959; Drackett, a household products manufacturer, acquired in 1965; and Mead Johnson, a producer of infant formula and children’s vitamins, purchased in 1967. At the time of the acquisition, Clairol had already made marketing history as a result of the popular advertising campaign “Does she or doesn’t she? Hair color so natural only her hairdresser knows for sure!”

The 1970s and 1980s: New Management and New Products

Richard Gelb, the son of Clairol’s founder, reluctantly joined Bristol-Myers after the acquisition to head the Clairol operation. Gelb was given a wide berth in managing Clairol, and he did so well that he was promoted to executive vice-president and then to president under chairman Gavin MacBain. Gelb became president just as Bristol-Myers’s growth was flattening out. A string of new-product failures during the late 1960s had drained finances and depressed stock value. In 1972, Gelb was appointed chair and CEO. He initiated a comeback over the next decade by spending $400 million advertising the company’s most popular brands, and by expanding its line of health care products. This growth was accomplished in part through the acquisitions of Zimmer Manufacturing Company, a producer of orthopedic and surgical products, in 1972; and Unitek Corporation, a dental equipment supplier, in 1978.

Under Gelb’s leadership, Bristol-Myers was able to shift gears quickly in response to market changes. When concern over the use of fluorocarbons threatened the spray deodorant market in the mid-1970s, the company increased advertising of its Ban roll-on deodorant. This strategy vaulted Ban into the top-selling spot, and increased the sales of all other roll-on products by 75 percent in one year.

Soon thereafter, however, the company suffered a major marketing setback with its Clairol products. In 1977, the National Cancer Institute reported a link between an ingredient used in hair colorants, 2-4 DAA, and cancer in laboratory animals. Bristol-Myers disputed these findings at first, but later introduced a new line of hair coloring products which was reformulated and did not include 2-4 DAA as an ingredient. The decision eventually helped the company overcome the effects of the bad press it had received.

Bristol-Myers’ continued attention toward health-care research was also a major factor in its resurgence. Beginning in the late 1970s, the company began to use cash generated by its consumer-products business to fund the research and development of additional drugs beyond its antibiotics and synthetic penicillins. Several new areas were explored, including cardiovascular agents and anticancer drugs.

At the time, Bristol-Myers was the only pharmaceutical company to invest in anticancer drugs, because growth potential appeared small. The company obtained the marketing rights to several anti-cancer drugs developed by the National Institutes of Health and other research institutions, universities, and drug companies, and was well positioned when that market took off. Between 1974 and 1980, Bristol-Myers launched li new drugs for treatment of cancer and other diseases. Although none of these products were breakthrough drugs, they contributed over $200 million in sales to the company by 1980. This growth occurred despite the company’s relatively small research budget.

Company Perspectives:

Our company’s mission is to extend and enhance human life by providing the highest quality health and personal care products. To our customers, we pledge excellence in every-thing we make and market, providing you with the safest, most effective and highest-quality products. We promise to improve our products through innovation, diligent research and development, and an unyielding commitment to be the very best.

The company was already an experienced marketer of overthe-counter (OTC) analgesics. Its Excedrin and Bufferin brands had accounted for one-quarter of the total market for nonprescription pain relievers until the early 1960s, when an OTC version of Johnson & Johnson’s Tylenol—a non-aspirin product—took a significant percentage of Bristol-Myers’s market share away. In the mid-1970s, Bristol-Myers challenged Johnson & Johnson with Datril, a non-aspirin product priced lower than Tylenol. Johnson & Johnson responded quickly, lowering the price of Tylenol.

In 1981, Bristol-Myers settled a series of ten-year-old anti-trust suits alleging that Bristol-Myers and Beecham Group, a British pharmaceutical company, had improperly obtained a patent on the antibiotic ampicillin. The suits also accused the firms of engaging in restrictive licensing practices, which had resulted in excessive charges to hospitals, wholesalers, and retailers.

The following year, a series of product-tampering incidents occurred involving various over-the-counter analgesic products, including Bristol-Myers’s Excedrin capsules. The company responded to new Food and Drug Administration (FDA) regulations in 1983 with tamper-resistant packaging for its capsule products.

In 1984, Bristol-Myers signed an agreement with Upjohn, which enabled it to introduce Nuprin, a new nonprescription form of ibuprofen pain reliever. With the agreement, Bristol-Myers again gained the means to take on Tylenol once again. It also pitted the firm against American Home Products, which already sold a pain reliever under the Anacin brand, and was planning to launch a new ibuprofen-based product called Advil.

At this time, Bristol-Myers entered the market for drugs used to treat anxiety and depression. The company licensed the rights to products manufactured by foreign firms, while continuing to invest heavily in its own pharmaceutical research and development. The firm had reorganized its internal research operations and, in 1984, built a multimillion-dollar research facility in Wallingford, Connecticut. Two years later, Bristol-Myers received FDA approval to market its own tranquilizer product, BuSpar, which did not produce many of the negative side effects of other antidepressant drugs already on the market.

In 1986, the firm became enmeshed in the complex acquisition of Genetic Systems Corporation (GSC), a Seattle-based biotechnology company. GSC was founded in 1980 by a group of entrepreneurial microbiologists who teamed up with Syntex Corporation, a drug company, to manufacture and market tests for sexually transmitted diseases. Three years later, the partners formed another venture, Oncogen, to manufacture products for cancer treatment, and in 1985, they offered Bristol-Myers an opportunity to invest in the operation. Later that year, a Bristol-Myers competitor—Eli Lilly & Company—acquired Hybridtech, a leading producer of monoclonal antibodies. Bristol-Myers then negotiated an agreement with GSC management to buy GSC and Oncogen, unaware that GSC had negotiated a similar deal with Syntex two months before. After threatening a lawsuit, Syntex elected to withdraw its offer for GSC in ex-change for a $15 million compensation package provided by Bristol-Myers and for marketing rights to selected GSC and Oncogen products. Bristol-Myers sold GSC to Sanofi, a French pharmaceutical firm, in 1990.

In June 1986, a second incident of tampering with capsule-type pain relief products caused two deaths in the Seattle area. This incident led Bristol-Myers to recall its Excedrin capsules nationwide. It soon withdrew all of its nonprescription capsule products from the market, including Comtrex, a cold relief medication. The capsules were replaced with the caplet, a speci-ally coated, capsule-shaped pill. With this action, Bristol-Myers became the second company in its industry, after Johnson & Johnson, to end the sale of OTC medication in capsule form.

In an attempt to establish a stronger position in the field of coronary care, Bristol-Myers negotiated an agreement in March 1987 to acquire SciMed Life Systems, a manufacturer of coro-nary balloon angioplasty catheters and other disposable products for treating cardiovascular disease. Two months later, Bristol-Myers withdrew its offer after SciMed was sued by Eli Lilly & Company for patent infringement.

Meanwhile, Bristol-Myers continued to grow as a manufacturer of prescription pharmaceuticals, lessening its dependence on consumer products by focusing on acquired immune deficiency syndrome (AIDS) research. Because both cancer and AIDS research were virology-based, this area was a natural fit for the company. In 1987, Bristol-Myers obtained an exclusive license to produce and test two new AIDS drugs, dideoxyadenosine (DDA) and dideoxyinosine (DDI). It also received FDA approval to test an experimental AIDS vaccine on humans.

In 1989, the company negotiated an agreement with Gerber Products Company to manufacture and market Gerber Baby Formula directly to U.S. consumers. Controversial advertising for this product touched off a boycott of the company’s line of formula products, however. A group of pediatricians felt that Bristol-Myers was attempting to discourage breastfeeding, and attempting to compromise physicians’ influence in baby formula selection.

Key Dates:

1887:

William McLaren Bristol and John Ripley Myers invest in the Clinton Pharmaceutical Company.

1900:

The company changes its name to Bristol-Myers Company.

1915:

Henry Bristol, William Bristol’s oldest son, becomes general manager.

1928:

The company becomes a part of Drug, Inc.; William Bristol Jr. and Lee Bristol become head of manufac-turing and advertising, respectively.

1933:

The holding company disbands.

1957:

Henry Bristol becomes chair of the board; Fredric N. Schwartz becomes president and chief executive officer.

1959:

Bristol-Myers acquires Clairol.

1967:

Bristol-Myers acquires Mead Johnson.

1972:

Richard Gelb is appointed chair and chief executive officer.

1983:

The company introduces tamper-resistant packaging for its capsule products.

1984:

Bristol-Myers builds a multimillion-dollar research facility in Wallingford, Connecticut.

1989:

Bristol-Myers merges with Squibb Corporation; Gelb becomes chief executive.

1994:

Major reorganization; worldwide revenues total $11.4 billion.

In November 1989, Bristol-Myers merged with Squibb Corporation. Squibb had been established in 1858 and was among the oldest U.S. pharmaceutical companies. Over half of Squibb’s sales were generated by Pharmaceuticals, and the company also owned a profitable cosmetic business. Furthermore, the two firms had similar corporate cultures. The merger also brought together two chief executives, Bristol Myers’ Gelb and Richard M. Furlaud of Squibb, who had been friends for 25 years and had discussed the idea of a merger occasionally over the previous three years.

The 1990s: Jockeying to Become the Top Pharmaceutical Company Worldwide

As part of the merger agreement, Richard Gelb became chairman and chief executive officer of the combined company, while Furlaud, his counterpart at Squibb, became president and headed up the company’s pharmaceutical business. Squibb benefited from Bristol-Myers’ biomedical research capabilities and its established presence in consumer health products. That market was becoming increasingly important to Squibb, since several competitors were already negotiating agreements to market their prescription drugs in OTC forms to consumers. In Squibb, Bristol-Myers obtained a new source of prescription drugs with strong sales potential, particularly in the cardiovascular area, and a sizable budget to add to its own continuing research operation.

The merger was not without tension, unfortunately. By December 1990,2,000 employees—four percent of the total workforce—had been laid off, and Bristol planned to close 60 pharmaceutical plants worldwide. Closings of 6 of 18 consumer products plants were scheduled through 1993. Nevertheless, the merger gave Bristol an important worldwide presence, thanks to Squibb’s strong position in Europe, the world’s largest drug market.

As it entered the 1990s, Bristol-Myers Squibb’s goal was to achieve the top spot in world pharmaceutical sales by the year 2001. The company received FDA approval for its cholesterol-lowering drug, Pravachol, in 1991. Bristol-Myers Squibb also had several other drugs in various stages of development: Videx, used to fight AIDS, and Taxol, an anticancer drug made from the bark of the pacific yew tree, among others. The FDA gave the company the go-ahead in early 1993 to market Taxol to ovarian cancer patients. In February 1993, however, the U.S. Subcommittee on Regulation, Business Opportunities, and Energy accused Bristol-Myers Squibb and several other pharmaceutical companies of overpricing, pointing to Taxol’s price of six to eight thousand dollars per complete treatment. The company maintained that the price was not excessive, and declined to supply the subcommittee with the data used to set the price.

Despite the controversy, by the end of the first quarter of 1993, sales at Bristol-Myers Squibb had increased four percent, or $2.8 billion. By the end of the year, worldwide revenues totaled $11.4 billion. In 1993, two committees of the U.S. Food and Drug Administration gave the go-ahead to new uses of two of the company’s existing products: Capoten, for use by patients who had suffered a heart attack, and Megace, for treatment of anorexia and HIV-related weight loss. In 1995, Bristol-Myers introduced Glucophage, the first new class of drugs to be used in almost 20 years in the U.S. to treat people with adult-onset diabetes. The drug increased the effectiveness of the insulin a person produced, and thus helped control blood glucose levels without causing hypoglycemia. Bristol-Myers also continued research into Zerit, a new remedy for people with HIV infections.

In January 1993, Bristol signed a contract with Mead Johnson, establishing a joint venture to produce and sell Enfamil and Enfapro infant formulas in Guangzhou, China. Nevertheless, the main focus of research at Bristol-Myers Squibb remained in anti-cancer drugs. Company scientists sought to develop drugs that kill cancerous cells with fewer side effects in the patient. Its first success in this area came in 1994, when the company succeeded in locating a semi-synthetic source of paclitaxel, the critical ingredient of Taxol, in the taxus baccata plant.

Led by Charles A. Heimbold, Jr., the company’s newest chief executive, the company also undertook a major reorganization of its international consumer business in 1994 as part of its goal of continued global expansion. It created three business units: one overseeing the company’s consumer business in Japan; a second overseeing consumer businesses in Canada, Europe, the Middle East, and Latin America, as well as Clairol business in the U.S.; and a third overseeing consumer and nutritional markets in the Far East. It also made several acquisitions in the mid- to late 1990s. In 1994, it purchased the remaining shares of UPS A, a French pharmaceutical group that specialized in pain treatment, in which Bristol had had a minority share since 1990. In 1995, it acquired Calgon Vestal Laboratories from Merck and Co., Inc., which it added to its ConvaTec division. In 1997, it sold off its Linvatec subsidiary, which manufactured arthroscopy products and powered instruments, to CONMED.

New discoveries continued through the rest of the nineties. In 1996, Genzyme Transgenics Corp., working with Bristol-Myers, announced the birth of a genetically altered goat, which carried the gene for an anticancer drug. Beginning in 1996, Bristol-Myers scientists collaborated with BioServe Technologies, a NASA-funded non-profit, to explore the use of space for developing commercial products. Crew members aboard Discovery shuttles tested rates of fungal and bacterial fermentation in weightlessness, medicinal plant growth, and x-ray crystallography. In 1997, Bristol-Myers’ Mead Johnson subsidiary, working with Cytyc Corporation, co-promoted Cytyc’s ThinPrep Pap Test, shown to be more effective than the conventional smear in diagnosing women’s health problems.

The future of Bristol-Myers Squibb Company at the turn of the century was dependent upon continued product leadership on an international basis in each of its highly competitive core businesses, as well as a continuing commitment to research and develop new products. Several forces—including an aging population, an increasing percentage of women in the full-time workforce, and a growing number of nontraditional households—were expected to create needs that would have a strong influence on the company’s consumer products business. The company took a slight hit in 1998, when after years of litigation, it settled upon the final cost of its breast implant product and prescription drug pricing liability—approximately $400 and $500 million to be paid out to injured or overcharged consumers. In 2000, as a wave of consolidation swept the pharmaceutical industry, the company, with about $20 billion in annual sales, downplayed the need to merge, but would not rule it out. In September, it announced that it would sell its Clairol operations and Zimmer orthopedics implants to concentrate on its core pharmaceutical business. “We are not looking back or standing still,” one company officer noted in the Los Angeles Times in April 2000, adding “We are looking at all our options with great intensity.

Principal Subsidiaries

Apothecon, Inc.; Bristol-Myers Squibb Manufacturing; Clairol Incorporated; Convatec Limited; Matrix Essentials, Inc.; Mead Johnson & Company; Westwood-Squibb Pharmaceuticals, Inc.; Zimmer, Inc.

Principal Competitors

Aventis S.A., Glaxo Wellcome, Merck & Co., Inc.

Further Reading

Bristol-Myers Company Special Report: The Next Century, New York: Bristol-Myers Company, 1987.

“Bristol-Myers Squibb Announces New Organization for Consumer Businesses,” PR Newswire, May 9, 1994.

“Bristol-Myers Squibb Gets an Okay on Taxol,” Chemical Marketing Reporter, January 4, 1993, p. 3.

“Bristol-Myers Squibb Reports Results,” PR Newswire, April 21, 1993.

“Drug Setback May Make Bristol-Myers a Takeover Target,” Los Angeles Times, April 21, 2000, p. C1.

Frazier, Lynne McKenna, “Bristol-Myers Squibb to Sell Warsaw, Indiana-based Orthopedic Implant Firm,” News-Sentinel, September 27, 2000.

Hager, Bruce, “Marriage Becomes Bristol-Myers Squibb,” Business Week, December 3, 1990, pp. 138–39.

“Nielsen Signs Agreement with Bristol-Myers Squibb Company,” PR Newswire, Feburary 22, 1994.

—Sandy Schusteff
—updated by Marinell Landa and Carrie Rothburd

Bristol-Myers Squibb Company

founded: 1887

Contact Information:

headquarters: 345 park ave.
new york, ny 10154-0037 phone: (212)546-4000 fax: (212)546-4020 url: http://www.bms.com

OVERVIEW

Bristol-Myers Squibb is one of the largest pharmaceutical companies in the United States. The company has three core business groups: Worldwide Medicines, Nutritionals and Medical Devices, and Worldwide Beauty Care. The pharmaceutical division (part of the Worldwide Medicines group) accounted for 60 percent of the company's revenues in 1998. That division focused on the development of cardiovascular, anti-infective, and anticancer drugs during the late 1990s.

Bristol-Myers Squibb competes with many pharmaceutical companies, such as Merck, Ciba-Geigy, and Pfizer, and with consumer product companies, such as Procter & Gamble and Gillette. The company's strength is attributed to its wide range of products and competitive positioning in the market. The company's future lies in maintaining and expanding its core product lines, developing new products, and expanding through licensing, partnerships, collaborations, and acquisitions.

COMPANY FINANCES

Bristol-Myers Squibb earned 1997 revenues of $16.7 billion, up from $15 billion in 1996. The company's net income also rose, from $2.8 billion in 1996 to $3.2 billion in 1997. Almost 60 percent of sales—approximately $11 billion—were generated in the United States. By product segment, the company's pharmaceuticals earned the largest percentage, 60 percent of revenues ($9.9 billion); nutritional products earned $1.9 billion (11 percent); medical devices earned $1.8 billion (11 percent); beauty care earned $1.7 billion (10 percent); and consumer medicines earned $1.3 billion (8 percent).

In 1997, Bristol-Myers Squibb earned $3.14 per share, up from earnings per share (EPS) of $2.80 in 1996. According to the company's first quarter reports, 1998 earnings per share (as of mid-1998) were $3.58. The company's stock was priced around $115 per share in mid-1998. Its 52-week high was $117, and its 52-week low was $71 per share.

ANALYSTS' OPINIONS

Analysts at Zack's Investment Research reported increased earnings per share for the company in mid-1998 (at $3.57 per share), and they expected the company's growth to continue even more rapidly. The firm projected earnings of $4.06 per share for Bristol-Myers Squibb during fiscal year 1999. However, recommendations for stock transactions were mixed, with about one-third of analysts recommending a "strong buy" rating for the company, another third recommending a "moderate buy," and remaining analysts recommending a "hold" rating. While the company's performance was clearly not expected to falter, stock prices were at historic highs, and some felt the company would not be able to sustain its growth rates.

HISTORY

Upon developing a plan for producing pure ether and chloroform, Dr. Edward Squibb founded Squibb in 1858. Dr. Squibb did fairly well, passing the business on to his sons in 1891. Squibb provided penicillin and morphine to troops during World War II. Mathieson Chemical bought the company in 1952, and Olin Industries bought Mathieson in 1953. Olin Mathieson Chemical was formed but Squibb retained its identity. During the late 1960s and early 1970s, Olin Mathieson Chemical reorganized and the company's name was changed to Squibb Corporation. During the late 1970s, Squibb introduced Capoten, a major cardiovascular drug; Capoten was the first drug to attack a specific disease-causing agent and was an important product for Squibb.

William Bristol and John Myers bought the Clinton Pharmaceutical Company in 1887. The company originally sold pharmaceuticals in bulk quantities. In 1900, the company incorporated and changed its name to Bristol-Myers. Some of the company's early products included Sal Hepatica, a mineral salt laxative, and Ipana, a toothpaste containing a disinfectant. During World War II, Bristol-Myers manufactured penicillin for the Allied armed forces. Bristol-Myers continued to grow and began to expand internationally during the 1950s. The company expanded partially through acquisition, obtaining companies such as Clairol, Mead Johnson, and Zimmer. New drugs for treating cancer and anxiety were introduced in the 1970s and 1980s.

FAST FACTS: About Bristol-Myers Squibb Company

Ownership: Bristol-Myers Squibb is a publicly owned company traded on the New York Stock Exchange.

Ticker symbol: BMY

Officers: Charles A. Heimbold, Jr., Chmn. & CEO, 64; Michael F. Mee, Sr. VP & CFO, 55; Charles G. Tharp, Sr. VP, Human Resources, 46; Kenneth E. Weg, Exec. VP & Pres., Worldwide Medicines Group, 59

Employees: 53,600

Principal Subsidiary Companies: Bristol-Myers Squibb's principal subsidiaries are: Bristol-Myers Products; Bristol-Myers Squibb Co. Industrial Div.; Bristol-Myers Squibb Co. Mead Johnson Nutritionals; Calgon Vestal Laboratories; ConvaTec; Clairol Inc.; Maxtrix Essentials; Edward Weck Inc.; Mead Johnson Pharmaceuticals; Westwood-Squibb Pharmaceuticals Inc.; and Zimmer Inc.

Chief Competitors: As a manufacturer and marketer of pharmaceuticals and healthcare products, Bristol-Myers Squibb's competitors include: Abbott Labs; American Home Products; Amgen; Ballard Medical; Bayer; Biogen; Biomet; Chiron Corp.; Ciba-Geigy; Danek Group; Dial; Dow Chemical; DuPont; Eli Lilly; Genentech; Gillette; Glaxo Wellcome; Glycomed; Hoechst; Immunex; Johnson & Johnson; L'Oreal; Merck; Mitek Surgical; Monsanto; Novo Nordisk; Pfizer; Pharmacia & Upjohn; Procter & Gamble; Rhone-Poulenc; Roche; St. Jude Medical; Sandoz; Schering-Plough; SmithKline Beecham; U.S. Surgical; and Warner-Lambert.

In 1989, Bristol-Myers acquired Squibb Corporation, forming Bristol-Myers Squibb. Together, the companies offered a strong consumer health product line, an expanding prescription drug line, biomedical research facilities, and a large budget for further research. When formed, the new company became the second largest pharmaceutical company in the world. Since then, the company has met with more success in product development.

In 1996, Bristol-Myers Squibb introduced Pravachol, a drug that lowers cholesterol, and it became the company's second drug to earn more than $1 billion in sales. In 1997, Bristol-Myers Squibb acquired the rights to develop two protease-inhibitor compounds as possible treatments for HIV and AIDS from Novartis. It also began offering Excedrin Migraine—the first and only over-the-counter migraine medication to get FDA approval.

STRATEGY

Bristol-Myers Squibb's strategy is to focus on the customer. New products are researched and new partnerships are formed to offer customers the broadest line of health and personal care products possible. The company has also developed a policy called "segment selling." Sales teams are structured to offer a diverse mix of products to meet customers' needs. Segment selling has achieved cost-saving benefits and has given sales representatives more time to promote other products.

Bristol-Myers Squibb represents its products to customers as "answers." For example, the company was committed to working with Medicaid programs, and to facilitate that effort, it developed an econometric matrix demonstrating cost-effective answers to healthcare dilemmas. Presentations were made to Medicaid officials to illustrate how the use of pharmaceuticals could control healthcare costs and how budgets would be affected. As a result, both Florida and Texas decided not to put restrictions on monthly per patient spending on prescription drugs.

In 1998, the company expanded its line of beauty aids with the purchase of privately held Redmond Products, maker of Aussie natural hair care products.

INFLUENCES

Bristol-Myers Squibb has faced many challenges throughout its history. The company was challenged in the early 1960s when Johnson & Johnson introduced the over-the-counter nonaspirin pain reliever, Tylenol. Bristol-Myers Squibb fought back with its introduction of Datril and priced it below Tylenol. Still, during the late 1960s, growth was slow and many new products were not selling. The company decided to concentrate on advertising its core brands and increasing its healthcare products line. This line was expanded with the acquisitions of Zimmer Manufacturing, an orthopedic and surgical products company, and Unitek Corporation, a supplier of dental equipment.

In the mid-1970s, there was growing concern for the amount of flourocarbons being emitted into the atmosphere with the use of aerosol sprays. Bristol-Myers Squibb responded by stepping up advertising of its Ban roll-on type deodorant. Subsequently, Ban became the number one selling deodorant. Similarly, in 1977, the National Cancer Institute discovered a link between a common hair colorant ingredient, 2-4 DAA, and cancer in laboratory rats. Bristol-Myers responded by offering a new line of hair-coloring products and removed the questionable ingredient from its original line of products.

CHRONOLOGY: Key Dates for Bristol-Myers Squibb Company

1858:

Dr. Squibb establishes Squibb, producing pure ether and chloroform

1887:

William Bristol and John Myers buy a failing pharmaceutical company in New York called Clinton Pharmaceutical Company

1898:

Clinton Pharmaceutical becomes Bristol-Myers Company

1900:

Bristol-Myers incorporates

1928:

Bristol-Myers and other drug companies become a part of Drug, Inc., a newly formed holding company

1933:

Drug, Inc. folds

1952:

Mathieson Chemical buys Squibb and Olin Industries buys Mathieson

1959:

Bristol-Myers acquires Clairol

1984:

Upjohn and Bristol-Myers sign an agreement allowing Bristol-Myers to develop Nuprin, a non-prescription form of ibuprofen

1989:

Bristol-Myers merges with Squibb Corporation to form Bristol-Myers Squibb

1997:

Bristol acquires the rights to develop possible treatments for HIV and AIDS; releases Excedrin Migraine

Product-tampering became a problem in the early 1980s, and Bristol-Myers Squibb's Excedrin was one such product that was affected. In 1983, Bristol-Myers introduced tamper-resistant packaging for its capsule products in response to the new Food and Drug Administration regulation. Tampering occurred again in 1986, this time causing two deaths. Bristol-Myers recalled the Excedrin capsules and pulled all of its nonprescription capsules from shelves. Capsules were replaced with caplets, a capsule-shaped pill with a special coating. The company became the second in its industry to discontinue the use of capsules in the over-the-counter market.

One of Bristol-Myers Squibb's most successful drugs was Taxol, the company's brand name for paclitaxel, a trace compound found during the 1970s that National Cancer Institute researchers discovered stops the growth of some cancerous tumors. Though the company did not discover the drug, it finished clinical studies for the Institute in cooperation with Hauser, Inc., a Colorado lab that worked out issues related to extracting the drug from its source—yew trees. Though the company couldn't get a patent since it did not invent the drug, it received five years of exclusive marketing from the government as a reward for its efforts in product development. Since its release, Taxol has turned into an incredibly successful method of treatment for ovarian and breast cancer—as well as a cash cow for Bristol-Myers Squibb. In 1997, the drug had worldwide sales of $941 million and became the company's second-largest seller. It was estimated that Taxol accounted for up to 15 percent of 1997 profits of $3.2 billion.

CURRENT TRENDS

The demand for hair color and hair care products increased throughout the 1980s and 1990s as a result of the expanding middle-aged market. Taking advantage of a burgeoning market, the company's Clairol subsidiary stepped up advertising and revamped its Nice 'n Easy and Ultress brands. The Ultress brand featured a more contemporary package and supermodel Linda Evangelista as its spokesperson.

Bristol-Myers Squibb's subsidiary Zimmer, Inc. was approved by the Food and Drug Administration in 1998 to manufacture and market a new formula for "cross-linked polyethylene." The formula, developed at the Massachusetts Institute of Technology (MIT), would improve wear performance on joint replacement components. Also in the medical arena, the company was sponsoring a public awareness initiative for diabetes. As part of this effort, Bristol-Myers Squibb was hoping to get at least 1 million Americans to get their blood sugar levels tested, as well as their level of risk for type 2 diabetes.

In mid-1998, Bristol-Myers Squibb also expected to launch a new "pharmaceutical robot" designed to mix compounds, perform experiments, and measure reactions. Named the "Haystack," this robot was expected to perform one month's worth of human experimentation in a single day. Bristol-Myers Squibb would join the ranks of Glaxo Wellcome, Smithkline Beecham, and Zeneca Agrochemicals, all of whom already use similar automation in product research and development.

PRODUCTS

Bristol-Myers Squibb has four product categories in three core business areas: prescription drugs and consumer health products (Worldwide Medicines group), medical devices and toiletries (Medical Devices group), and beauty aids (Worldwide Beauty Care and Nutritional group). In 1998, prescription drugs accounted for 60 percent of the company's total sales. The company's major pharmaceutical drugs include cardiovascular drugs such as Capoten, Corgard, Monopril, and Pravachol; cancer drugs such as Platinol, TAXOL, and VePesid; an antibiotic drug called Azactam; an antidiabetic drug named Glucophage; a cholesterol reducer called Questran; and an AIDS treatment drug named VIDEX. The consumer health products sector includes such products Bufferin, Excedrin, Comtrex, and Nuprin.

Popular brands of toiletries and beauty aids include Herbal Essences (shampoo and conditioner), Ban (deodorant), Keri (lotion), Miss Clairol (hair coloring), Nice 'n Easy (hair coloring), Theragran (vitamins), and Vavoom (hair sprays). Medical devices offered include products for minimally invasive surgery, as well as orthopedic and surgical instruments.

In 1995, Bristol-Myers Squibb's Mead Johnson Nutritionals subsidiary launched its Boost nutritional drink. The drink was targeted at active adults seeking quality calories in the quest to stay physically fit. Boost was a milk-based, lactose-free drink that was high in calcium and low in saturated fat with 25 vitamins and minerals. In 1998, Mead Johnson again sought to capitalize on this trend, introducing "Choice dm" nutrition bars and through its purchase of "Choco Milk," one of Mexico's leading nutritional supplements.

CORPORATE CITIZENSHIP

Bristol-Myers Squibb has always strongly supported medical research. In 1977, what is now known as the Bristol-Myers Squibb Unrestricted Biomedical Research Grants Program was established. The plan awarded grants to medical schools, hospitals, and research centers in the United States and around the world. The medical research community praised the program since it supported scientific research in a time of limited government assistance. The program also forged a better relationship between academic scientists and the pharmaceutical industry. Since 1984, the company has also offered its Fellowship Program in Academic Medicine for Minority Students. Through the program, more than 280 students were awarded grants of up to $6,000, which enable the students to spend 8-12 weeks studying under biomedical researchers.

Bristol-Myers Squibb also made concentrated efforts to "prevent and minimize pollution, to reduce accidents, conserve resources, and promote EHS [Environmental Health and Safety] protection, education, and technology transfer around the globe." Employees from varying disciplines within the company worked together to develop business improvements that would also prove beneficial to the environment.

GLOBAL PRESENCE

Bristol-Myers Squibb has a very strong global presence. With international sales representing almost 50 percent of its business, Bristol-Myers Squibb remains deeply committed to strengthening current and establishing new business relationships in the international market. The company's largest markets are in the United States, France, Japan, Germany, and Canada. Since growth has been slowing in mature markets such as the United States and Europe, Bristol-Myers Squibb continues its expansion plans to Eastern Europe, Latin America, and Asia. In some cases, Bristol-Myers Squibb has established warehousing systems, and in other cases the company has formed alliances with local or competing companies.

In China, the only means to conduct business was through the establishment of plant operations, and Sino-American Shanghai Squibb was formed as a result. The joint pharmaceutical venture made Bristol-Myers Squibb the first western pharmaceutical company to break into the Chinese market. Bristol-Myers Squibb's subsidiary Zimmer opened a teaching facility in Shanghai in 1994. The facility, located at the Shanghai Academy of Sciences, provided ongoing education in orthopedic surgery to Chinese surgeons.

Japan is the second largest market for Bristol-Myers Squibb. In 1994, the company opened a new research laboratory in Kanagawa to unite research efforts.

In 1994, a European market research study led Bristol-Myers Squibb to acquire A/S GEA Farmaceutisk Fabrik, a Scandinavian manufacturer of generic brand pharmaceuticals. The purchase increased Bristol-Myers Squibb's generic brand market share in Europe. With business opportunities continuing to grow in Russia and Eastern Europe, Bristol-Myers Squibb's subsidiaries have opened plants in Poland, Hungary, and the Czech Republic.

EMPLOYMENT

At Bristol-Myers Squibb, diversity was a clearly stated value. In 1996, the company produced a full report devoted to the issue titled, "Diversity and Equal Opportunity at Bristol-Myers Squibb Company." Among efforts made by the company to further that corporate goal were minority fellowships, college and graduate internship programs, high school programs, minority recruitment, community program support, and financial assistance.

SOURCES OF INFORMATION

Bibliography

barrett, william p. "delaying tactics." forbes, 23 march 1998.

bristol-myers squibb company 1997 annual report. new york: bristol-myers squibb co., 1998.

"bristol-myers squibb company." hoover's handbook of american business 1996. austin, tx: the reference press, 1995.

"bristol-myers squibb company." hoover's online, 25 june 1998. available at: http://ww.hoovers.com.

bristol-myers squibb company home page, 25 june 1998. available at: http://www.bms.com.

dennis, kathryn. "girl talk: bristol-myers squibb's product bias shows through its cyberclub for women." adweek eastern edition, 26 february 1996.

gillis, chris. "pharmaceuticals, shampoo and logistics."american shipper, october 1995.

kuchinskas, susan. "drug needle in the haystack." wired news, 17 february 1998.

mirabile, lisa, ed. international directory of company histories. detroit, mi: st. james press, 1990.

morrison, shauna, ed. standard & poor's 500 guide. new york: the mcgraw-hill companies, inc., 1996.

For an annual report:

on the internet at: http://www.bms.com/financial/index.htmlor write: secretary, bristol-myers squibb co., 345 park ave., new york, ny 10154-0037

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. bristol-myers squibb's primary sics are:

2834 pharmaceutical preparations

2844 perfumes, cosmetics, and other toilet preparations

3842 orthopedic, prosthetic, and surgical appliances and supplies