Trained in his native Italy as a doctor, Giovanni Caforio speaks not only English and Italian, but also Spanish, French and Portuguese. As he steps into the CEO role today at Bristol-Myers Squibb ($BMY), the question will be how well he speaks dollars and cents.
The 50-year-old Caforio takes over a company whose top line will be hit hard by the patent loss for one of its blockbusters, and while it is having early success in the new field of immuno-oncology, the New York drugmaker has seen its initial hopes to be a leader in new hep C drugs fade.
Caforio takes over from outgoing CEO Lamberto Andreotti at an auspicious time for BMS. Last week it caught Wall Street off guard with a surprisingly good first quarter, beating the revenue projections of analysts by about $200 million. Hours later, the FDA approved generics of BMS’ antipsychotic Abilify, a drug which brought in $2.2 billion for the company last year. BMS has been bracing for the patent cliff hit, having already warned investors to expect 2015 sales to slide 10% this year, but while the expectations have been set, it is still a tough place to be in your first year in the job.
There has also been disappointment for the company’s fortunes in the burgeoning category for oral hep C treatments. It had been expected to be a leader, but after it got beat to the market by competitors Gilead Sciences ($GILD) and AbbVie ($ABBV), it had to rethink its approach. It recently resubmitted to the FDA its treatment Daklinza (daclatasvir), which is approved in Japan, but which the FDA rejected last fall when BMS pulled the application for the companion drug with which it was to be paired.
On the brighter side, BMS is seeing success with in the immuno-oncology field. It cancer fighter Yervoy has already been doing well, as the Associated Press points out, and a new drug, Opdivo, performed so well in trials that it won two fast-track approvals from regulators and wowed analysts who have pushed peak sales projections to $7.3 billion by 2020, up from the $5 billion that was forecast only weeks before. The drug is expected to rake in at least $600 million for BMS this year.
And it is not as if Caforio doesn’t already know the ropes at BMS. He has been there nearly 15 years, having started as vice president for medicine sales in Italy in 2000. He moved quickly up the corporate ladder until being named chief commercial officer in 2013 and chief operating officer last year. He also gets a big pay boost to compensate him for the year ahead. He is set to collect a compensation package of $8.735 million, which could swell to as much as $11.35 million or more if things go better than expected. Not exactly the $27 million that Andreotti collected for his final act but a big boost from the $3.3 million he earned in 2013.
By Eric Palmer