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Mar 31, 1998

A week in the life of: Tim Cost

Bristol-Myers Squibb's IRO - and Niri's next chairman - records a so-called typical week in drug company investor relations

Day One

New York: Our midtown Manhattan office needs to be leveraged with the investment community, and we try to do that with either face-to-face meetings (at our place) or lunches (almost anywhere) or visits (at their place) nearly every day. Considering heavy travel schedules to go where the money is (out there - not in the comfort of our office), we try to be in headquarters on Mondays as often as we can. Portfolio managers and analysts who need to get hold of you can reliably do it then; and we can also corral key company contacts with some regularity.

After a brief internal company meeting on a few new products, we receive a real blessing: open time to work the phones. We have a very heavy focus on institutional investors, so virtually all free time is spent reaching out to them - either returning phone calls or making our way through our 'target list' of prospective holders, which is cut by city and investment style as well as over- and underweighting to us and our sector. There are investors we try to handle in 'maintenance mode' but there are dozens of others who demand a tremendous amount of work early on to bring them up to a comfortable level of knowledge. Those are the ones who start each conversation with 'Do you have a minute?' Hot topics these days are twofold: at the macro level, FASB 128 (basic vs diluted... still helping people through that), managed care/HMOs, the FDA, Asia and competition; and the 'micro' or company-specific issues: prescription trends on key products (every Monday), business-line growth rates, research direction and priorities.

IR director Dan Gibson and I head out this evening to co-host a dinner with Goldman Sachs for about 20 of our large holders on the topic of heart disease and the products we are advancing to treat the number one killer in the world. Turnout is very good and our management team does an excellent job in group discussion and Q&A... looks like the hours of prep time have paid off.

Day Two

New York: I check the Bloomberg and talk to the Carson Group about our latest monthlies early in the morning. No major issues. Greenspan, overseas markets, and futures trading all look reasonable. Growth investors are beginning to come to our stock in numbers, which has been a key part of the targeting effort.

Today we are presenting at Merrill Lynch's annual investor conference. We in IR will speak at about a dozen conferences like that in 1998, bringing management with us only now and then. Today we're laying some important cable for 300 analysts and investors and our whole senior corporate and drug team will be there (CEO, CFO, president of pharmaceuticals, and head of R&D). We've prepared Q&A and talking points, while public affairs have done a good job creating the speech and visuals.

But first, a breakfast meeting with Diserio Partners, a sharp new investment firm considering heavily weighting in the drug group. Clearly, not all of our targets are Vanguard and Capital. The meeting goes very well. We tend not to 'pitch' but more to create a conversation, and we ask a lot of questions. They are smart, with different perspectives. We lean heavily on the basics: candor, consistency, credibility. Very active discussion. Good way to start the day.

Then, a quick meeting with the IT experts about the mobile office we're creating: when you're traveling constantly (with a two-person office, supported by top-notch assistant Marianna Destefano), you need damn good tools. Laptop, cellphone, pager, electronic organizer (300 plus phone numbers), fax, voicemail, the net... they used to be luxuries, now they're standard. The challenge is how can we do it smaller, faster, cheaper, smarter... sooner? IT would like us to pick any two.

Then on to the Merrill Lynch conference. All of our major holders are there, as expected. Speech goes fine, no surprises in the Q&A (always a victory), then we head off to a break-out room to meet in one-hour blocks with Fidelity, Janus and Capital. About 75 mn shares visit that small room in that short time. Good use of resources. They like to kick the tires, and our management team has become very good at these scrums, frequently picking up competitive information as we go along.

Day Three

On the road: Road work is critical. Relationship building. Today we'll cover two key investors in Baltimore then make it back to Philadelphia for a group lunch and three one-on-ones in the afternoon. We have one-page 'cheat sheets' on all of the funds we meet with, covering how much they hold of us, our competitors and our sector, and a review of their investment styles, money under management, decision-making process and key managers. Sometimes we'll even show the sheet to the managers we're meeting with (often sector-focused investors don't know the top holdings of their own firm overall). We like to go into these meetings 'without a net' - no big notebooks full of stuff. It makes us prepare much more rigorously - but it's something we have to stay on top of all the time to be sharp.

The day goes well. Plus, we gather a terrific amount of competitive information, and tonight we leave a few voicemails for operating people based on things we heard earlier in the day on competitive product attributes and timelines. Our investor meetings tend to be more like two-way conversations than one-way interrogations - if we do them right, of course.

Day Four

Boston: This is the single largest city for BMY holdings in the world. Jammed full, we try to handle two or three one-on-ones in the morning, a group lunch for five to ten key holders, then another two or three one-on-ones in the afternoon, frequently followed by an informal dinner with a good sell-sider (especially if the Yankees or the Lakers are in town). It is a very full day, but strangely energizing to debate with smart people. We'll be bringing the A-team into Boston in September to meet all these same investors: Fidelity, Putnam, Mass Financial, Wellington. The management team will be briefed on who we saw, what they asked, what we said, what their concerns are, who the key players are... all before they step into any conference rooms this fall. We try to make the prep harder than the actual meetings because it builds confidence all around. We will also track our moves today to see if any transactions follow these discussions focusing on our primary pharmaceuticals business - new product pipeline, research portfolio, competitive positioning, and current businesses. In an industry where everyone is looking for consolidation, a $100 bn company with a good M&A history cannot hide from that type of discussion. But, just as we work closely with public affairs, operating units and research heads, we spend a fair amount of time with legal going over key disclosure issues making sure we're all current and accurate.

Great company performance and a good, understandable strategy drive share price, but hopefully, good IR can help investors see that improved performance is coming, and affect valuations accordingly.

Day Five

Princeton, New Jersey: Our major operating unit and research group headquarters. We open the day with a presentation at a town hall meeting of employees - every one a shareowner. Whether it's 1,200 sales reps at a regional meeting in Atlanta, 300 scientists in New Jersey, or 25 finance people in New York, everyone has an interest in the stock price. We go over more than just the requisite dinner party buzzwords and lingo (although 'discount to the market multiple' and 'the downside is protected' have gotten us all out of a hole now and then). Excellent reception to the talk... lively Q&A.

The rest of the day is spent on the phones, then a meeting with top pharmaceuticals people to go over the coming quarter, a conference call with Niri on board issues, and a promising discussion with Fleishman-Hillard on a new individual shareowner targeting program we're considering. And finally, a great talk with our competitive intelligence people on how the data being gathered through a variety of sources is really starting to come together to give us a better picture of future direction (ours, and others). The velocity of information is increasing. The day ends with a quick update with the CFO and a review of the fast-crowding 1998 calendar - we just have to hit California harder. Can we get to Denver, Minneapolis and Kansas City before the quiet period? When is the next time we can get out with sales reps to hear their discussions with docs?

Next week we start the process again - with a dozen different things that, nevertheless, we can all consider equally 'typical' of our jobs. But no more note-taking for the 'Dear Investor Relations' diary.

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