Bristol-Myers Tightens Its Focus on Drugs

Pushing for profit growth and a sharper focus on its core pharmaceuticals business, Bristol-Myers Squibb Co. announced that it would sell or spin off its lackluster Clairol beauty care division and its Zimmer hip and knee implants business. As part of its growth plan, the drug maker also intends to bolster its presence in Europe and Japan through strategic collaboration ventures. In striving for focus rather than diversity, the company aims to funnel more of its effort and resources into its higher-margin drug operations, and in the process revive its flagging stock price. Bristol-Myers has said that it plans for medicines to eventually account for 85% to 90% of its revenue, compared with about 72% now. Bristol-Myers’ stock has taken a hit from a number of setbacks recently. In September, a generic version of its cancer drug Taxol was approved by regulators. Also, its colorectal cancer drug Orzel and hypertension drug Vanlev have run into roadblocks in getting to market. Commenting on Bristol-Myers’ move, analysts have said that 10 years ago, diversification in drug companies was seen as a good strategic move, since it was expected to provide stability and one-stop shopping for managed care companies. Now, they note, most pharmaceutical firms are streamlining down to the core and shedding non-drug operations.