Bristol-Myers Squibb Company History

Address:

345 Park Avenue
New York, New York 10154-0037
U.S.A.

Telephone: (212) 546-4000
Fax: (212) 546-4020

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

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 everything 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. Key Dates:

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 manufacturing 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.

Company History:

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 chairperson), 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 11 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.

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 non-aspirin product&mdashøok 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 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. 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&mdashquired 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 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, a 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.

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.

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 UPSA, 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&mdash⟩proximately $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.

Bristol-Myers Squibb Company History

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Key Dates:

Company History:

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