Bristol-Myers eliminates CEO Dolan over Plavix deal

A pharmaceutical company can be ranked best not only by its development of new medicines but how its executives fight the patent wars. A patent drug however, ensures mass profits, but often faces controversies and opens to challenge. A right step to confront those obstacles can bring extra billions in revenues to manufacturers but a wrong move can lead the stocks to downfall and in some cases cost CEOs their jobs. And, this is what exactly happened to Peter R. Dolan, chief executive of the drug maker Bristol-Myers Squibb (BMS).

The troubled five-year term of Dolan as CEO of the New York based pharmaceutical corporation, BMS ended yesterday when the board dismissed him over not handling a patent dispute involving the company’s blockbuster drug, Plavix, efficiently.

Dolan's offense was to bungle a patent fight with Canadian generic drugmaker Apotex over BMS's blockbuster Plavix, a potent oral antiplatelet agent often used in the treatment of coronary artery disease, peripheral vascular disease, and cerebrovascular disease .

Distressed with the speculations that he might lose the fight, Dolan tried to buy off Apotex to keep the generic maker from coming to market. But the move took an unfavorable twist and Apotex overwhelmed the market with millions of generic copies of Plavix, cutting BMS's sales by hundreds of millions of dollars.

Dolan was forced to resign from the post after a court-appointed monitor last night told the Bristol-Myers board they should be dismissed. He would be replaced by board member James Cornelius, who until a few months ago led Guidant Corp., the troubled manufacturer of cardiac devices.

Bristol-Myers also eliminated its general counsel, Richard Willard, and appointed Sandra Leung, corporate secretary, as acting counsel.

The orders of terminations came on the recommendation of Frederic Lacey, the federal monitor, who had been probing the company's corporate governance regarding the Plavix deal. Despite the recommendation, Lacey, a former judge, did not find Dolan or Willard guilty of any misconduct, the drugmaker said.

Dolan, 50, who joined Bristol-Myers Squibb in 1988 in the over-the-counter products division, was named chief executive officer of Bristol-Myers Squibb on May 1 2001, and was the seventh CEO since the company was founded in 1887. Coincidently, he was elected chairman of the Board of Directors on September 12, the same day he has eliminated from his job (Sept. 12, 2006), in 2001.

This was not the first time that Dolan has faced the controversy instead his tenure at Bristol-Myers was marked by a series of crises ranging from federal probes of accounting practices to failed investments to its loss of market exclusivity for one of its major revenue sources, Pravachol, and culminating in the downfall encompassing Plavix.

Bristol-Myers shares, which have nose-dived during Dolan's five-year tenure, today closed up 4% at $24.32 amid heightened speculation that the company could be up for sale.