Pharma major Bristol-Myers Squibb Co said on Wednesday 5 December that its earnings will grow at least 15 per cent annually through 2010. This will be accomplished in part by a major restructuring that will eliminate 10 per cent of its workforce and close more than half its factories over the next three years.

The number of  ''mature'' branded products is also to be reduced by 60 per cent till 2011. The restructuring is expected to generate $1.5 billion in new cost savings, say company officials. The move is planned to help Squibb cope with the patent expiration in late 2011 on its bestselling blood clot prevention drug, Plavix.

The company also plans to sell its medical imaging business and is reviewing strategic alternatives for its ConvaTec wound healing unit and Mead Johnson nutritionals unit. Cash from the deals on these units is to be ploughed into its higher-profit core pharma business.

Squibb has raised its 2008 earnings per share forecast, excluding special items, from a previous range of $1.60 to $1.70 a share to $1.65 to $1.75 a share. That means an expected profit growth next year of up to 19 per cent.

The company has 43,000 employees and 27 drug manufacturing plants globally, generating annual sales of about $18 billion. It has suffered from poor earnings in recent years owing to patent expirations on important medicines including cancer drug Taxol. Now, it is back on a profit upswing, thanks to growing sales of newer medicines such as schizophrenia treatment Abilify and cancer drug Erbitux.

Notwithstanding this, the coming patent expiration on the $5 billion-a-year Plavix would result in plunging sales of the pill once generics appear, which will be cushioned by savings from the restructuring.

The $1.5 billion in cost savings comes on top of previously announced savings of $500 million by the end of 2007 and $100 million by the end of 2008, from other initiatives. The restructuring comes on the heels of aggressive cost-cutting by other drugmakers like Merck and Pfizer, which are also girding for patent expirations on their big drugs.

Squibb''s earnings in 2007 are expected to jump as much as 35 per cent from last year, when sales of Plavix crumbled under competition from a generic rival made by Apotex. The cheaper Apotex copycat is no longer available in the market, after a federal judge ruled that it infringed patents on Plavix, which Bristol-Myers sells in partnership with Sanofi-Aventis.

The latest restructuring moves also mean pretax costs of $900 million to $1.1 billion, with about $300 million to come this year and up to another $500 million in costs over 2008. Analysts expect that Squibb will set up production of its prescription medicines offshore, perhaps in India and China, which are increasingly involved in drug production. Sanofi-Aventis already makes drugs in India, and has set up an R&D centre in Goa.

The company now intends to step up its own manufacturing of highly profitable biotech drugs, which are proteins made in living cells out of genetic material. It has also pinned its hopes on an array of new experimental drugs, including Saxagliptin for diabetes, Belatacept to prevent rejection of transplanted organs, Ipilimumab to treat cancer melanomas and a product called Apixaban to prevent dangerous blood clots among patients undergoing orthopaedic surgery and patients with irregular heartbeats.