Bristol-Myers Squibb - The Biggest R&D Spenders In Biopharma

Company: Bristol-Myers Squibb
2011 spending: $3.8 billion
2010 spending: $3.56 billion
Change: + 6.7%
Percentage of revenue: 17.9%

Once again, Bristol-Myers Squibb ($BMY) ended a year with a lot more to show for it than companies with much bigger research budgets.

In its 10-K this year, BMS boasted that "over the last few years, we executed our strategy to transform into a next generation biopharmaceutical company." And unlike so many boasts in the industry, the company can back up its "string of pearls" strategy with hard proof of its success.

Over the past year, Bristol-Myers has acquired two notable biotechs--Amira, a 2010 Fierce 15 company, working in fibrosis, and Inhibitex, a leader among the hepatitis C companies. The $2.5 billion spent to acquire Inhibitex netted BMS-986094 (formerly INX-189), adding a spotlight development program to the work already under way on daclatasvir, which posted stellar efficacy data combined with Gilead's ($GILD) hot hep C property.

The buyout and most recent data on daclatasvir puts BMS among the front-runners to develop an all-oral, interferon free antiviral cocktail that promises to be a game-changer for patients. And even though Gilead Sciences apparently is either stalling or refusing to push ahead with a late-stage study of their promising matchup, BMS is in the hunt--with a significantly smaller investment than Gilead's $10.8 billion blowout buy. And even if Gilead may be reluctant to partner, BMS has successfully expanded its work with Johnson & Johnson.

BMS has reportedly been trying to buy Amylin ($AMLN) for $3.5 billion, drawn to the potential it sees there. BMS has also added some key new products to its lineup. A little more than a year ago, Yervoy (ipilimumab) was approved for skin cancer. And Nujolix (belatacept) was approved to prevent kidney organ rejection for transplant patients. And apixaban, an anti-clotting hopeful partnered with Pfizer ($PFE), is under regulatory review, with the potential to earn billions once it hits the market. Delayed PDUFA date June 28.

Of course, even Bristol-Myers isn't bullet-proof on the R&D front, as it proved recently with a late-stage failure for brivanib--a cancer drug that is still being studied in three other late-stage studies--and a thumb's down vote by FDA experts in a panel review of the diabetes drug dapagliflozin, an SGLT2 inhibitor partnered with AstraZeneca ($AZN) that may need to undergo new, and very expensive studies to provide regulators with the data they're demanding. It's fared better in Europe, though, where an expert panel recently lent its endorsement.

Those two treatments were among its top 5 drug prospects listed at the end of 2011. But company execs are still bullish about their late-stage prospects, planning to continue to boost R&D spending in the single digits this year as they devote about a third of the budget to Phase III programs.

Last year, BMS was essentially tied with Takeda Pharmaceutical for 10th place in the spending game. This year Takeda held steady with $3.5 billion in R&D expenses, leaving BMS in the top 10 as its R&D spending edged up. If we were ranking companies by overall effectiveness and strategic coherence, BMS would rank much higher.

Bristol-Myers Squibb - The Biggest R&D Spenders In Biopharma

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