Bristol-Myers Squibb Co. said yesterday it plans to shed its medical-imaging unit in Billerica as part of a broad plan to slash expenses and refocus its business.
The New York pharmaceuticals giant said it will cut 4,300 jobs worldwide, one-tenth of its workforce; close more than half its manufacturing plants by 2010; and explore selling two other divisions, ConvaTec, a wound-care products supplier, and its Mead Johnson Nutritionals business.
Like other major drug makers, Bristol-Myers has faced increased competition from generic drug makers as patents on its old blockbuster drugs expire. Pfizer Inc., the world's largest drug company, outlined plans this year to cut 10,000 jobs, about 10 percent of its workforce. Johnson & Johnson recently said it would cut 5,000 workers, 4 percent of its workforce. And Merck & Co. is also eliminating thousands of jobs.
"It is difficult to see our valued colleagues leave the company, but right-sizing our workforce across all areas is critical to achieving our productivity goals and enhancing the competitive position of the company," Bristol-Myers chief executive James Cornelius said in a statement.
But Bristol-Myers said it plans to go forward with plans to build a biotech manufacturing plant at the former Fort Devens military base in Central Massachusetts.
The main impact of the company's cost-cutting plan in the state will be the sale of its medical-imaging unit, which has about 800 employees, including 400 in Billerica.
Jeffrey MacDonald, a Bristol-Myers spokesman, said the company decided to sell the unit, originally acquired from DuPont in 2001, because a patent on the unit's key product, Cardiolite, is due to expire next year. Cardiolite, developed by researchers at Harvard University and the Massachusetts Institute of Technology, is a radioactive compound used to help track blood flow in the heart. The company cut 123 jobs at the unit last spring, mostly in sales and marketing.
"It faces some significant challenges going forward," said MacDonald.
Bristol-Myers has continued to try to beef up its ability to produce new biologics - drugs made from living organisms instead of by mixing chemicals in a lab - as a way to replenish its pipeline of future medications. In September, the company agreed to spend at least $430 million to buy Adnexus Therapeutics Inc., a Waltham biotechnology company. Bristol-Myers has also hinted it could make further acquisitions, despite the heavy job cuts.
The company said the moves will help it save $1.5 billion in annual expenses. But it faces further challenges.
A patent on the company's top-selling product, the anticlotting medicine Plavix, is slated to expire in about four years. The drug, which the company markets with Sanofi-Aventis SA, booked $1.25 billion in sales in the recent quarter. "We don't have a complete answer on how to offset or mitigate that cliff," Cornelius said.
Bristol-Myers Squibb stock rose 20 cents to $29.26.
Analysts had mixed reactions to the news.
"On balance, I like the actions they're taking today," said John Farrall, a healthcare analyst with National City Private Client Group, according to Reuters. "They continue to take noncore assets out of the corporate structure - that's a good thing."
But in a note to clients, Banc of America Securities analyst Chris Schott continued to express concern over upcoming patent expirations.
"We do not believe that the potential near-term upside from expanded cost reductions will be able to offset the next wave of patent expirations in key Bristol franchises," said Schott, referring to Plavix and an antipsychotic drug, Abilify.
Material from Globe wire services was used in this report. Todd Wallack can be reached at twallack@globe.com.
