Chairman, chief executive officer, and president, Bristol-Myers Squibb Company
Born: January 6, 1956, in Salem, Massachusetts.
Education: Tufts University, BA, 1978; Dartmouth College, MBA, 1980.
Family: Son of John Ralph Dolan and Lois Burkhart; married Katherine Helen Lange (former executive director of Saint Joseph's Hospital); children: two.
Career: General Foods, 1983–1984, associate product manager; 1984–1985, product manager; 1985–1986, senior product manager; 1986–1987, general product manager; Bristol-Myers Squibb Company, 1988–1993, vice president of marketing; 1993–1995, president of marketing; 1995–1996, president of Mead Johnson Nutritional Group; 1996–1997, president of Nutritionals and Medical Devices Group; 1997–1998, president of Pharmaceuticals Group in Europe; 1998–2000, senior vice president for strategy and organizational effectiveness; 2000–2001, president; 2001–2002; CEO and president; 2002–, chairman, CEO, and president.
Address: Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154-0037; http://www.bms.com.
■ With 2003 sales of $20.8 billion Bristol-Myers Squibb Company at the start of the 21st century was one of the top pharmaceutical firms in the United States. The company specialized in anticancer, cardiovascular, and anti-infective pharmaceuticals; it was also active in the area of AIDS research and treatment, particularly through protease inhibitors, and was increasing its efforts to find genetic remedies for diseases—particularly infections—often in collaboration with other researchers. Although most of Bristol's sales came from perscription pharmaceuticals, the company also marketed Excedrin and Bufferin over the counter and, through its Mead Johnson subsidiary, sold infant formula. The company focused on creating
product franchises by manufacturing several leading products within each of its core markets; for example, as the manufacturer of TAXOL, Paraplatin, Platinol, and VePesid, Bristol was a leading producer of anticancer drugs. The chairman, CEO, and president Peter R. Dolan had a personal interest in cancer, as several members of his family suffered from the disease.
Dolan was the seventh CEO in the corporation's 114-year history. A 15-year veteran of the company, his ascent to the top was particularly quick—some said too quick—as at 45 Dolan became one of the youngest chief executives of any of the largest drug makers. As of 2004 Dolan's standing with the company was tenuous due to a series of poor management decisions and an accounting scandal that made him the target of a federal investigation.
Dolan acquired his first job delivering newspapers at age nine, which led to employment at the local fruit stand, a job prized by neighborhood boys. Among his memories from the dinner table at home were those of conversations between his mother and father about his father's job. Each night Dolan's mother would drill her husband about his company's inner workings and its key players; she mapped out her husband's climb to the top of the corporate ladder through so much repeated minutia that Dolan never forgot the names and titles of certain employees at his father's company.
The youngest of five children, Dolan inherited his mother's insatiable drive for success. At Tufts he was president of his fraternity, and at Dartmouth's Amos Tuck School of Business, where he earned his MBA, he was president of his class. As a first-year graduate student he cleaned tables in the cafeteria—a year later he was helping to run it. When recruiters came to the school, Dolan was sure of himself and his plans. In the New York Times he recalled saying, "I'm either going to be a United States senator or I'm going to be head of a packaged-goods company" (May 12, 2002).
Dolan's instincts were almost on target. He got his start marketing Jell-O and other desserts for General Foods; but after Philip Morris acquired the company, Dolan quit, telling the New York Times , "I decided I wanted to work at a healthcare company, rather than a tobacco company" (February 8, 2001).
Not long after Dolan began working at Bristol-Myers Squibb Company, and by 1993 he was in charge of Bristol-Myers Products, the firm's over-the-counter drug business. He played an important role in the company's push to invest more heavily in Excedrin, which in 1998 became the first over-the counter drug approved to treat migraines. Sales increased by 17 percent under Dolan's leadership.
As president of Bristol's Nutritionals and Medical Devices Group, Dolan had responsibility for the Mead Johnson Nutritional Group, which produced infant formula. Under Dolan, Mead Johnson made international business a top priority. The company opened manufacturing facilities in four countries and international sales climbed to 40 percent of the corporation's revenue by 1996.
Dolan spearheaded a number of initiatives emphasizing new-product development and international marketing, establishing the 70-employee Global New Business Development Team. He set up what were affectionately referred to as the "Big Hairy Audacious Goals," which included making Mead Johnson number one in the world in infant formula; operating company-wide on a global level; launching a new product with sales of $100 million; garnering 30 percent of business from new products; and cutting operating costs by $100 million. While Dolan's unit did not meet all of those goals by the 1997 target date, Mead Johnson did become the world's largest infant-formula manufacturer; by 1986 the subsidiary controlled 23.6 percent of the world market. Also during Dolan's tenure Mead relaunched Sustacal, positioning it toward active seniors as opposed to the institutional market.
In November 1998 Bristol reorganized its senior management, signaling the start of a race for the company's top jobs for when the executive vice president Kenneth Weg and the chairman Charles Heimbold would retire in 2000 and 2001, respectively. Weg and Heimbold formed the office of the chairman, which would groom their successors. Dolan was mentioned as a second-tier candidate for the CEO job and was promoted to senior vice president for strategy and organizational effectiveness, heading a council to consider strategic alternatives for the company.
Dolan's mother had died of ovarian cancer, and his sister had both ovarian and colon cancer, which eventually went into remission. In 2000 he was the creative force behind advertisements for Taxol featuring Lance Armstrong, the American cyclist who won the Tour de France after his own battle with cancer. Bristol-Myers Squibb and Armstrong teamed up to launch the Cycle of Hope, a national educational campaign for people with cancer or at risk of developing the disease. Dolan noted in the New York Times , "The company's mission of extending and enhancing life is very personal to me" (February 8, 2001).
Somewhat surprisingly Dolan proved to be on the fast track; he was named CEO in February 2001 and chairman in 2002. Heeding calls from Wall Street, he quickly jettisoned auxiliary businesses—selling Clairol, the number-one hair-color brand and a longtime anchor product, for example—and focused on pharmaceuticals. He set audacious goals for the company, vowing to double the company's sales and earnings within five years—a promise he would later come to regret. In 2002, his first full year at the top, sales totaled $18.1 billion, down 1 percent from 2000.
Sagging sales, however, would be the least of Dolan's problems. In 2001, amid much scrutiny, he negotiated a $2 billion deal with Imclone Systems, the company notorious for its involvement in the Martha Stewart insider-trading scandal. The guiding principle had been to join forces to develop and promote the long-anticipated cancer drug Erbitux. But in 2002 Imclone received a "refusal-to-file" letter from the U.S. Food and Drug Administration, signaling a shortfall of convincing data with regard to the drug's efficacy. Investor outrage over the fact that Dolan had invested in the partnership without solid reassurance resulted in a write-down of $367 million—most of Bristol's investment in Imclone.
Analysts speculated as to whether Dolan was truly the right executive for the top job at Bristol-Myers. They didn't like the fact that he had climbed the corporate ladder so quickly and said that he lacked the character-building experiences that would have taught him how to deal with adversity. Dolan said in the New York Times that he took such criticism seriously but added, "I may be at my best when I'm underestimated" (May 12, 2002). Dolan evidenced his determination through athletic feats. In his 20s his inability to swim was not enough to thwart his plans to compete in a triathlon—he simply taught himself the crawl. At age 40 he ran two marathons in three weeks, in one beating the personal marathon record he had set 15 years earlier. Dolan and his wife were also competitive cyclists.
Most damaging to Dolan's reputation may have been the restatements of sales and earnings from previously issued financial statements from 1999 through 2001. During that time period, the company later admitted, Bristol had lied, inflating sales by as much as $3.35 billion and earnings by at least $900 million. The restatements were thought to have been the result of a commonly used—albeit morally questionable—tactic known as "stuffing the sales channel." Bristol conceded that in its quest to meet unrealistic growth expectations, the company had used sales incentives to entice distributors to buy more products than their pharmacy customers reasonably needed. As a result, Bristol seemed to be selling large quantities of its drugs, when in fact the products were sitting untouched on distributors' shelves.
The restatements spiraled into a widespread investigation of the company's business practices. The Sarbanes-Oxley Act, passed in 2002 as part of an aggressive federal attempt to rein in corporate abuse, required that top company officials swear to the truth of their companies' financial data and provided stiff penalties for those who knowingly engaged in deception. In August 2002 Dolan swore to the accuracy of the company's statements—and proceeded to deny any responsibility for them only a few months later.
After laying low through one of the darkest periods in the company's 147-year history and dealing with a deluge of criticism, Dolan emerged from the shadows. As reported by the New York Times , in a conference call on April 29, 2003, he struck an optimistic note, saying he hoped the company would soon move into the "business-as-usual period" (May 18, 2003).
Analysts were skeptical—especially since federal prosecutors were still in the midst of their investigation. Barbara A. Ryan, the analyst at Deutsche Bank Securities who was among those interviewed by prosecutors, noted in the New York Times , "You're listening to him on the one hand and thinking on the other that he's the subject of a major criminal investigation. That certainly doesn't help rebuild credibility" (May 18, 2003).
In 2003 Bristol's board of directors approved the five-year plan Dolan had put forth to save the company. In addition to implementing management controls that would prevent corporate abuses from resurfacing, Dolan vowed to bolster the company's research and development efforts and strengthen its product pipeline.
With many of the company's drugs nearing the end of patent protection, the pressure to roll out new blockbusters was immense—losses from patent expirations were estimated at about $1 billion in annual net sales. Instead of relying on partnerships and alliances, Dolan shifted focus to developing more products internally; he aimed to produce two-thirds of new drugs in the company's own laboratories.
In the first half of 2003 two major drugs were approved: Abilify, an antipsychotic, and Reyataz, the first once-daily protease inhibitor for the treatment of HIV/AIDS. In addition limited clearance was given to Erbitux, the sidelined cancer drug licensed from Imclone. Analysts at SunTrust Robinson Humphrey estimated that Erbitux sales could peak at more than $700 million.
The promising drugs signaled a potential new beginning for the company. Morning star projected an average revenue growth rate of 3 percent through 2007. The Morningstar analyst Todd Lebor observed in Med Ad News , "Bristol isn't the cash machine of the past, but we think its future cash flows justify a $27 stock price. We think Bristol will pull out of its death spiral and reward patient investors" (September 1, 2003).
While Bristol had the chance to pull itself out of its slump, the competitive Dolan found himself in one race he would possibly prove unable to finish. Bristol's board temporarily left him in control, but with the investigation into the company's accounting practices looming in the background, their continued loyalty was by no means assured. Although Dolan had only been named CEO in 2001, he had been an executive since 1998, making it impossible to indemnify him for any penalties resulting from accounting improprieties. Lebor noted in Med Ad News , "He's hanging on to his job by a very thin thread, and we think the accounting shenanigans, misguided focus, and poor investments under his watch will catch up to him soon" (September 1, 2003).
See also entry on Bristol-Myers Squibb Company in International Directory of Company Histories .
Abelson, Reed, and Greg Winter, "The Optimist Leading Bristol-Myers," New York Times , May 12, 2002.
Boersing, Charles, "Time to Heal: Management Issues and Generic Competition Continue to Plague Bristol-Myers Squibb, but the Company Has Promising New Products and a Strong Start in 2003," Med Ad News , September 1, 2003, p. 68.
Harris, Gardiner, "Will the Pain Ever Let Up at Bristol-Myers?" New York Times , May 18, 2003.
Petersen, Melody, "Bristol-Myers Squibb Names Marketing Official as Chief Executive," New York Times , February 8, 2001.