Bristol-Myers Squibb could reap as much as $10 billion by selling its Mead Johnson nutritional business and other non-pharmaceutical units, analysts say.

Bristol-Myers announced a restructuring Dec. 5 that includes the cutting of thousands of jobs. The firm also is "reviewing a range of strategic alternatives" for Mead Johnson and its ConvaTec medical device business as it focuses on key growth products, including specialty and biological medicines and cardiovascular and metabolic drugs.

Analysts told "The Tan Sheet" there could be many potential buyers if the units are offered. However, the New York-based firm has not said it would sell the units.

Analysts said the infant and children nutritional product unit had about $2.3 billion in sales in 2006. Bristol-Myers sold Mead Johnson's adult nutrition business to Novartis in 2003 for $385 million (¹ Also see "Bristol Sells Its Mead Johnson Adult Nutritionals Business To Novartis" - Pink Sheet, 22 December, 2003., p. 12).

In October, Bristol-Myers said nutritional sales for its fiscal 2007 third quarter increased 14 percent to $304 million in the U.S. and 18 percent to $371 million in international markets.

Mead Johnson and ConvaTec are "not core to the pharma and they are attractive and have high profit margins," said Barbara Ryan, a Deutsche Bank analyst.

Ryan estimated Bristol-Myers could recoup as much as $7 billion in such a sale, while other analysts predict the firm could get as much as $10 billion.

Bristol Meyers is looking to see if it is "maximizing its unit," said Tony Butler of Lehman Brothers.

The restructuring plan targets generating $1.5 billion in reductions by 2010 and eliminating 6,500 employee positions. Some positions have been eliminated, but the majority of cuts will come in 2008 and 2009.

The plan includes shutting down half of its manufacturing facilities and cutting by 60 percent the number of brands in its mature products portfolio.

- Joe Cantlupe

Bristol-Myers Squibb Weighs Options On Mead Johnson

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