Does Bristol's tarnished rep put CEO among the year's worst?
Poor Lamberto Andreotti. Just a year ago, the Bristol-Myers Squibb ($BMY) CEO was accepting bouquets for his company's better-than-the-rest reputation in Big Pharma. Now, he's nominated as the year's worst CEO.
What happened? Inhibitex, for one thing. Andreotti's company bought the hepatitis C drugmaker in January for $2.5 billion, on the promise of its lead drug. In August, it dropped the experimental treatment on safety concerns and wrote off $1.8 billion on the Inhibitex deal. It was a particularly dramatic example of how a deal can go bad--and vindication for those who figured Bristol overpaid for Inhibitex in any case.
But that's not all, Bloomberg says. There's Eliquis, the blood thinner Bristol-Myers developed with Pfizer ($PFE). In June, FDA delayed the approval, once again, putting the drug on the back foot against rivals in the warfarin alternative market. Though Eliquis is still pegged as a potential blockbuster, the delay gives Boehringer Ingelheim's Pradaxa and Bayer and Johnson & Johnson's ($JNJ) Xarelto even longer to capture market share.
Motley Fool is a bit more scathing; in nominating Andreotti for worst-CEO honors, the investment site deemed Bristol's famous "string of pearls" strategy a failure. It echoes Bloomberg in noting that Bristol-Myers shares have underperformed their peers this year. The stock dropped 1.8% this year when other pharmas have gained, the Fool says. And despite the stumbles, Andreotti got a 27% pay raise.
Analysts have downgraded the stock, Bloomberg reports. Only 9 of 24 who follow Bristol-Myers recommend buying. Thanks to a previous run-up, it's pricey compared with other drugmakers' shares.
Some say, however, that Bristol-Myers' new tarnish is relative. "Bristol was very successful last year and got a little bit more rich on the valuation basis," Fund Manager Les Funtleyder told Bloomberg. "Then they had a change where the news wasn't terrible but wasn't favorable, like the Inhibitex thing, and the rest of the industry saw more positive news flow."
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