"Big Pharma": Los ricos tambien compran...

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A tale of three drugmakers

Johnson & Johnson, the company with the most cash of those listed, is taking on a new strategy to build its pipeline. As an alternative to the conglomerate's usual strategy of acquiring companies and bolting them on, CEO William Weldon says the company will continue to use its new tactic of sharing risk through partnerships, like the recent deals with Elan and Crucell. With that kind of cash, it should be able to make a lot of them.

Novartis also has a lot of cash, but it's set aside for a rainy day. As part of its acquisition of a 25% stake in Alcon from Swiss conglomerate Nestle, Novartis agreed to a put option and got a call option for the rest of Nestle's stake in Alcon.

The call option gives Novartis the right to acquire the shares for $181 each between January 2010 and July 2011. The put option gives Nestle the right to force Novartis to buy the shares for a premium of 20.5% over Alcon's share price, but not to exceed $181 per share. Essentially, Novartis needs to have $28 billion available to make the purchase during those 18 months.

Bristol-Myers doesn't have the most cash available of the group, but its stash could have the biggest impact. The company is facing the loss of Plavix, which made up more than 28% of Bristol-Myers' revenue in the first three quarters of the year. The loss is already priced in; the company trades at ridiculous multiples -- near a multiyear low P/E and a dividend yield of 5.6% -- so any late-stage pipeline-stacking could have a major impact on its future.

At least it'll have a lot less competition.

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