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/-------------------- advertisement -----------------------\ Enjoy new investment freedom! Get the tools you need to successfully manage your portfolio from Harrisdirect. Start with award-winning research. Then add access to round-the-clock customer service from Series-7 trained representatives. Open an account today and receive a $100 credit! http://www.nytimes.com/ads/Harrisdirect.html \----------------------------------------------------------/ Bristol-Myers and Glaxo Said to Discuss Possible Merger May 31, 2002 By MELODY PETERSEN with ANDREW ROSS SORKIN GlaxoSmithKline and Bristol-Myers Squibb have held preliminary discussions about the possibility of a merger, executives close to the talks said yesterday. Both drug makers have been struggling in the last year because they have been unable to discover enough new drugs to make up for products that are now losing their patent protection. So far, the negotiations have been exploratory only, considering whether a GlaxoSmithKline purchase of Bristol-Myers would work rather than the details of how to execute it, the executives said. Top executives from each company have held meetings at Bristol-Myers's Princeton, N.J., offices in the last two weeks, according to Hemant K. Shah, an independent pharmaceutical analyst in Warren, N.J. Both companies refused to comment last night. But comments last week by Dr. Jean-Pierre Garnier, GlaxoSmithKline's chief executive, heightened speculation that the companies were contemplating a deal. When an analyst asked him about possible acquisitions, Dr. Garnier said if he found a good deal, he would not pass it up. Two weeks ago, John Coombe, GlaxoSmithKline's chief financial officer, told analysts that Bristol-Myers was "on our radar screen." Executives close to GlaxoSmithKline, the world's second-largest drug company, based in Britain, say the company has reservations about acquiring Bristol-Myers because of uncertainty over how deep its problems go. An executive close to Bristol-Myers said it was unclear whether Peter R. Dolan, that company's chief executive, was even willing to sell the company with its stock price as low as it is now. One executive put the chance of such a deal at less than 50 percent. Bristol-Myers has made several mistakes in the last year, including agreeing to pay almost $2 billion for the rights to sell Erbitux, a cancer drug that was being developed by ImClone. Soon after signing that deal, federal regulators refused to accept the drug's application for approval because of problems with the scientific data. The companies are now working to resubmit the application. At the same time, Bristol-Myers tried last year to compensate for its loss of sales to generic drug makers by giving wholesalers incentives to buy larger supplies of medicine than they needed. That tactic came back to haunt Bristol-Myers this year. The distributors now must use up the glut of inventory on their shelves, cutting Bristol-Myers sales this year by hundreds of millions of dollars. Like many other analysts, Mr. Shah believes that it is, as he put it, "almost inevitable" that Bristol-Myers will be taken over. Several top executives have left the company in recent months, including its chief financial officer and the executive in charge of its pharmaceutical business. "Bristol has a pretty empty nest upstairs," Mr. Shah said. Mr. Shah said he had been told that strategists at other companies, including Novartis and Johnson & Johnson, were considering a deal with Bristol-Myers. Bristol-Myers has a few promising drugs in its research pipeline, including aripiprazole, for schizophrenia, and atazanavir, for AIDS. But both Bristol-Myers and GlaxoSmithKline are now struggling to find enough new medicines, so joining their two pipelines would not solve their essential problem, some analysts say. Viren Mehta, a partner at Mehta Partners, a health care investment firm in Manhattan, said he had heard rumors about GlaxoSmithKline acquiring Bristol-Myers. While a combination would still leave them without enough new drugs, he said, it would create significant savings as the companies eliminated duplicate jobs and functions. Those savings would help provide a buffer for the next couple of years, he said. In his view, the savings would also help supply the money to pay for research using genomics and other new technologies, which are not yet producing new drugs but hold great promise. http://www.nytimes.com/2002/05/31/business/31DRUG.html?ex=1023853454&ei=1&en=a160409079a7ee17 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact [EMAIL PROTECTED] or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to [EMAIL PROTECTED] Copyright 2002 The New York Times Company <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! 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