Bristol-Myers’ Cornelius to retire as CEO, but still head board; COO Andreotti to succeed him

Bristol-Myers CEO to retire; COO to succeed him

TRENTON, N.J. — Drugmaker Bristol-Myers Squibb Co. said Tuesday its chief executive will retire in May and be succeeded by the current chief operating officer.

The move is the fourth official retirement from a senior health company executive position for James M. Cornelius, who had run Bristol-Myers for 3 1/2 years. He will remain chairman at the request of the company’s board.

The board chose Lamberto Andreotti, 59, to take over from Cornelius as the CEO.

Andreotti was named president and chief operating officer, in charge of the global pharmaceutical business, in March 2009. That positioned him to succeed Cornelius, who is now 66.

“I am aware of the challenges ahead,” Andreotti said, citing a possible U.S. health care overhaul and an anticipated plunge in revenue after the 2012 loss of patent protection for blockbuster blood thinner Plavix, which brings in roughly $5 billion a year.

He said the company is “well-positioned to overcome these challenges,” with about $10 billion in available cash and securities, a diverse line of prescription drugs and a strong pipeline.

Andreotti has been with New York-based Bristol-Myers for a dozen years, both overseas and in the U.S., and is one of the architects of the company’s strategy to transform into a top biopharmaceutical company. He previously worked for two other drug companies, KABI Pharmacia and then Pharmacia & Upjohn, which now is part of Pfizer Inc.

Andreotti holds a bachelor’s degree in engineering from the University of Rome, and a master’s degree from the Massachusetts Institute of Technology.

Cornelius will retire on May 4, 2010. He became Bristol’s chairman in February 2008 after being elected CEO by the board of directors in April 2007. That was after Cornelius had served as interim CEO for about eight months.

“I said before I was a reluctant CEO” this time, Cornelius told reporters during a conference call. “I truly didn’t have any aspirations to become a CEO” again and had to “convince my wife to move from Indianapolis to New York.”

Yet just five weeks ago, during a conference call announcing fourth-quarter results, Cornelius told analysts asking about succession planning that he didn’t intend to retire soon because he was still enjoying the job. He said he and his family are still discussing what’s next but that they will be moving back to Indianapolis.

Cornelius had been brought in after Bristol’s board fired CEO Peter R. Dolan in September 2006 at the insistence of a federal monitor who was overseeing its compliance with standards imposed to settle federal charges in a big accounting scandal.

Cornelius previously served as CFO at Indianapolis-based Eli Lilly & Co., where he worked for 28 years before “retiring” in 1995. He then retired twice from medical device maker Guidant Corp., in 2000 and again in 2006, when he had been chairman and CEO.

During his time at the helm of Bristol-Myers, Cornelius initiated a strategy dubbed the “String of Pearls” to sell off noncore businesses such as its Mead Johnson nutrition franchise and buy multiple pearls — biotech companies or products in development — to transform the company into a biopharmaceutical powerhouse.

Andreotti said the company already has completed nine such deals.

The most prominent was last summer’s $2.1 billion purchase of biotech company Medarex Inc. It owns successful antibody technology used to create biologic drugs that make the immune system attack cancer cells — and it has several of its own drugs in development.

Most of Bristol’s competitors instead have been focused on diversifying their product lines and slashing costs.

Bristol-Myers, the maker of blood thinner Plavix, the world’s second-best-selling drug, announced the changes Tuesday after the stock market closed.

The company’s other top sellers include schizophrenia and bipolar disorder drug Abilify, blood pressure drug Avapro, hepatitis B treatment Baraclude and HIV treatments Reyataz and Sustiva.

The company said it would not disclose information on Andreotti’s compensation or the retirement package Cornelius will be receiving until it distributes its proxy statement ahead of its annual meeting this spring.

Shares of Bristol-Myers changed hands at $24.72 in after-hours trading, unchanged from the regular close.