Last week we reported that a debt-refinancing at Mead Johnson yielded $1.75 billion in cash for parent Bristol-Myers Squibb. But that's just a fraction of the some $6.5 billion Bristol could net from a planned spinoff of that nutritionals business. All together, the $8 billion-plus would be a nice war chest for the sort of biopharma deals CEO James Cornelius (photo) likes.
The spinoff would take Bristol all the way back to its core business: drugs. "By executing our healthcare divestment strategy, we have sharpened our BioPharma focus, improved the overall financial strength of the company and supported our ability to pursue strategic business development opportunities," Cornelius said in a statement. "With the successful execution of this split-off, we fully consider ourselves a BioPharma company."
But is that intense focus good or bad? Depends on who's talking. Cornelius, obviously, calls it a good thing. But other Big Pharma CEOs have been intent on going the opposite direction, making deals in animal health, consumer health, and eye care in an effort to diversify beyond prescription drugs. Leerink Swann analyst Seamus Fernandez said the deal will make it even more important for Bristol to deliver drug sales. "The company still has to execute as a pharmaceutical company," he told the Wall Street Journal.