September 12, 2006
BMS ousts Dolan, retains former Lilly exec. as interim CEO
The board of Bristol-Myers Squibb named one of its directors and a former CFO for Eli Lilly as interim CEO of the company today, following a federal monitor’s recommendation to fire Peter Dolan.
James Cornelius was interim chief executive of Guidant from September 2004 through April 2006 and has been a BMS director since January 2005. Prior to his service with Guidant, Cornelius was a director, a member of the executive committee and CFO for Lilly.
BMS General Counsel Richard Willard also was replaced today by a temporary stand-in. Sandra Leung, vice president and corporate secretary, was appointed to act as interim general counsel, the company said in a statement issued this morning.
The moves came after a special session of the board last night, during which a federal monitor recommended firing Dolan and Willard in connection with a deferred-prosecution agreement signed with the US Attorney in New Jersey in the wake of a $2.5 billion channel-stuffing scandal last year.
BMS said in the statement that, “The monitor and the US Attorney did not find that there had been any violation of the deferred-prosecution agreement.”
However, multiple news reports stated that BMS violated terms of the agreement in its pursuit earlier this year of a pact to limit competition for its best-selling drug, blood-thinner Plavix.
The decision to fire Dolan clouded his standing at PhRMA, where he is chairman. With Dolan’s dismissal, two out of three of the group’s top officers are between jobs. Karen Katen, PhRMA board treasurer, stepped down from her position earlier this year as Pfizer vice chairman. Dolan’s successor at PhRMA is chairman-elect Kevin Sharer, chief executive of Amgen.
BMS said it will initiate a search committee to review “inside and outside candidates” for a permanent chief executive. According to The Wall Street Journal, no executive at the company is thought to be experienced enough to be CEO, and the firm has no succession plan in place.
The board, which already was expected to meet today to discuss Dolan’s fate, had few options but to follow the recommendation of the monitor, former federal Judge Frederick Lacey. If it refused, BMS could have faced charges in connection with the probe. Lacey has free reign to keep the company in bounds following the deferred-prosecution agreement that BMS signed with New Jersey.