Pharmaceutical firm Bristol-Myers Squibb (NYSE: BMY) announced that strong sales of Plavix and Abilify (an anti-clotting and psychiatric drug, respectively) helped boost the company's quarterly revenue. The boost wasn't enough though, as higher taxes and a litigation charge weighed on the company's profit, pulling it 3.5% lower.

BMY's quarterly earnings totaled 32 cents per share, a penny worse than a year ago. However, earnings excluding items would have been 48 cents per share (simple math tells me that the charges were 16 cents per share). These charges included a litigation charge that helped settle a shareholder lawsuit. Quarterly revenue checked in at $5.02 billion, which was 3% higher than the first quarter of 2007. Excluding the effects of the strong dollar, BMY's sales would have increased 8%. Expectations called for higher sales of $5.13 billion, but lower per-share earnings of 47 cents per share.

Bristol-Myers Squibb (NYSE: BMY - option chain) shares are headed higher today after the company said its fourth-quarter profit came in at $1.24 billion, or 63 cents per share, on revenue of $5.25 billion.

BMY's adjusted profit of 46 cents per share easily beat analysts' projections of 41 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BMY.

BMY opened this morning at $22.92. So far today the stock has hit a low of $22.72 and a high of $23.44. As of 12:05, BMY is trading at $23.39, up 1.14 (5.1%). The chart for BMY looks bullish and S&P gives BMY a positive 4 STARS (out of 5) buy ranking.

TheStreet.com's Jim Cramer says it's a quick way to ensure growth in the face of generics competition.

Pfizer's (NYSE: PFE) (Cramer's Take) moves suddenly make sense. You lay off your scientists, you buy the better group at Wyeth (NYSE: WYE) (Cramer's Take) , you get Wyeth's franchise and you slash the sales budget, and voila, you have growth.

That's the greatness of the pharma industry. You need mergers, especially when Obama has made it clear that he's not going to be in the camp of stifling generic competition, of which Pfizer faces the brunt of.

It is why I recommended Forest Labs (NYSE: FRX) (Cramer's Take) last night -- believe me, that's the cheapest. I own Bristol-Myers (NYSE: BMY) (Cramer's Take) because BMY looks like Wyeth with a bigger dividend and a great cancer franchise.

Celgene (NASDAQ: CELG) (Cramer's Take) too -- Celgene was approached not that long ago when it was much higher. CELG's another way to replenish.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"My selection for 2009 is Bristol-Myers Squibb (NYSE: BMY)," says Chuck Carlson, the leading advisor in the area of dividend reinvestment plans.

In his The DRIP Investor, he explains, "This pharmaceutical company has a lot to offer investors, including a high yield, a rising profit stream, and a speculative kicker in the way of takeover appeal." Here's his review.

"Bristol-Myers Squibb has a number of popular brands, including Plavix, the company's leading cardiovascular product; HIV treatments Reyataz and Sustiva; and oncology product Erbitux. Its stable of products has helped drive decent sales growth.

"Bristol-Myers Squibb has done a nice job of ?rming up its balance sheet. The company's cash coffers were boosted by the sale of its ConvaTec medical-device and wound-care business for $4.1 billion.

"At the end of the third quarter, the ?rm had more than $7 billion in cash and securities, a 'signi?cant majority' of which was invested in Treasury Bills and Treasury-backed securities.

Bristol-Myers Squibb (NYSE: BMY - option chain) shares are falling today after the European Medicines Agency said it has rejected a request by BMY to market its breast cancer drug Ixempra. The agency said the increase in survival rates using the drug was not significant enough to warrant approval. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BMY.

This morning, BMY opened at $18.92. So far today the stock has hit a low of $18.12 and a high of $19.30. As of 12:15, BMY is trading at $18.60, down $0.68 (3.5%). The chart for BMY looks bullish and S&P gives BMY a positive 4 STARS (out of 5) buy ranking.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four weeks as long as BMY is below $22.50 at December expiration. Bristol-Myers would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.

TGT hasn't been above $45 since early September and shown resistance around $21.50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.

Bristol-Myers Squibb (NYSE: BMY) shares are falling today after the Pharmaceutical Research and Manufacturers of America announced that effective January 1, 2009, drug-company sales representatives will no longer be allowed to give doctors free gifts or pay for restaurant meals on sales calls. This might result in BMY and other drugmakers having a tougher time selling their wares. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BMY.

After hitting a one-year high of $32.35 last July, the stock hit a one-year low of $19.43 in June. This morning, BMY opened at $21.26. So far today the stock has hit a low of $20.71 and a high of $21.30. As of 12:20, BMY is trading at $20.86, down 64 cents (-3.0%). The chart for BMY looks neutral but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $25 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in five months as long as BMY is below $25 at December expiration. Bristol-Myers would have to rise by more than 19% before we would start to lose money. Learn more about this type of trade here.

BMY hasn't been above $25 since January and has shown resistance around $22 recently. This trade could be risky if the company's earnings (due out on 7/24) are a positive surprise, but even if that happens, this position could be protected by resistance BMY might find at its 200 day moving average, which is currently around $24.50 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.

It's a nice day for shareholders of Kosan Biosciences Inc. (NASDAQ: KOSN), which is a cancer therapeutics company. The stock price is up 230% to $5.44.

That is, Bristol-Myers Squibb Company (NYSE: BMY) has agreed to purchase Kosan for $190 million. The transaction will be structured as a cash tender offer.

Founded in 1995, Kosan has two key anticancer agents in clinical development -- heat shock protein 90 (Hsp90) inhibitors and epothilones. Some of the treatments include multiple myeloma and metastatic breast cancer.

Basically, Kosan didn't have the wherewithal to take these drugs to market (after all, the capital markets have been fairly skittish lately). So, a partnership with Bristol-Myers does make a lot of sense. Keep in mind that the company has a large oncology business.

Interestingly enough, the parties also announced a separate licensing agreement to market Kosan's epothilone compounds. The deal involves an upfront $25 million payment as well as milestone payments.

Although, the agreement is only triggered if the merger falls through. In other words, Kosan has a nice backstop on the transaction.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi's anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

It's been slow, but the private equity folks are starting to warm up to dealmaking. In fact, a key deal came last week as Nordic Capital Fund VII and Avista Capital Partners agreed to plunk down $4.1 billion for ConvaTec, a division of Bristol-Myers Squibb Co (NYSE: BMY).

ConvaTec, which focuses on wound care, has been a star performer over the years. What's more, the deal will allow Bristol-Myers to devote its resources to its core pharma business, which certainly has some challenges – especially as drugs come off patent.

In addition, the deal has a global flavor as Nordic Capital is in Europe and Avista in the US.

It also looks like Bristol-Myers is not finished with its own dealmaking. For example, the company says it plans to launch a public offering of its Mead Johnson division.

What this really looks like, however, is that all these actions, for the most part, may just be a prelude for Bristol-Myers to sell itself to a mega pharma company.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Bristol-Myers Squibb Co. (NYSE: BMY) shares are trading higher after the company reported a first-quarter profit of $661 million, or 33 cents per share. BMY's adjusted profit came in at 42 cents per share, just above analysts' estimates of 41 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BMY.

After hitting a one-year high of $32.35 in July, the stock hit a one-year low of $20.05 in March. BMY opened this morning at $11.66. So far today the stock has hit a low of $11.10 and a high of $11.97. As of 12:30, BMY is trading at $11.27, up 57 cents(5.3%). The chart for BMY looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 12.1% return in just two months as long as BMY is above $20 at June expiration. Bristol-Myers would have to fall by more than 8% before we would start to lose money. Learn more about this type of trade here.

BMY hasn't been below $20 at all in the past year and has shown support around $21.60 recently. This trade could be risky if one of the company's drugs runs into problems with the FDA, but even if that happens, this position could be protected by the support the stock might find around $20, where it bounced in March.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.

"The stock that I think may put up the best performance in 2008 is Bristol-Myers Squibb (NYSE: BMY)," says Chuck Carlson, the industry's leading authority on dividend reinvestment plans and editor of The DRIP Investor.

Here, the advisor looks at the stock's role in the defensive pharmaceutical sector, its increasing dividend yield, and its takeover potential.

"I know this may strike some of you as an odd choice, especially given the fairly mediocre performance these shares have turned in over the last several years. However, some of the uncertainty hanging over these shares has been lifted.

"The firm has won its patent suit with Apotex over its important Plavix medication. Also, Bristol-Myers has finalized a civil settlement agreement with the U.S. Department of Justice.

"I like that the firm is cutting costs as well restructuring its operations. The company plans to reduce total headcount by approximately 10% by the end of 2010. Bristol-Myers recently announced the sale of its medical-imaging business.

"And Wall Street anticipates additional asset sales, possibly the company's woundcare supplies company, ConvaTec, and its Mead Johnson nutritional business. These moves would be consistent with the company's plan to become more of a player in the BioPharma sector.

"Two additional reasons Bristol- Myers may get some play in 2008 is that 1) health-care stocks traditionally perform well during rocky market periods; and 2) high dividend yielders usually provide a buffer during tough markets.

Bristol-Myers Squibb (NYSE: BMY)'s blood thinner Plavix is the second-largest selling drug in the world. It brought in over $3.4 billion in sales during the first nine months of this year. Eli Lilly (NYSE: LLY), however, believes it has a better treatment [subscription required]. According to The Wall Street Journal, its "new drug, known as prasugrel, is intended to treat patients on the verge of a heart attack." The new treatment can stop the build-up of platelets in the blood within thirty minutes

Lilly has a number of drugs going "off patent" in the next seven years. If these are not replaced, 50% of the company's revenue is at risk. It is not clear how long it will take the FDA to approve the drug, if it ever will.

The Journal writes that "in the head-to-head study, 9.9% of patients on prasugrel suffered either a heart attack, stroke or death from a cardiovascular cause, compared with 12.1% of those given Plavix. That is a 19% reduction in risk favoring prasugrel."

With new drugs, though, there is always a catch. Prasugrel is 32% more likely than Plavix to cause major bleeding.

Now the politics of drug approval will kick in. Experts for Bristol-Myers will say the new treatment is too dangerous and that Plavix is as close to perfect as a blood thinner can be. Lilly will claim that it can adjust the dose to cut down on bleeding and will get a legion of doctors to attest to that.

In the end, the patient can bleed to death or have a heart attack. Does it matter how he died?

Douglas A. McIntyre is an editor at 247wallst.com.

The earnings crunch continues to roll along, and here are a some highlights of this past week's earnings coverage from BloggingStocks:

• Aetna Inc. (NYSE: AET) beat expectations and raised its full-year guidance.
• Amazon.com Inc. (NASDAQ: AMZN) beat estimates by a penny and offered a poor outlook.
• American Express Co. (NYSE: AXP) delivered a positive surprise, with profits up 10%.
• Amgen Inc. (NASDAQ: AMGN) beat estimates, but revenue was flat.
• Anheuser-Busch Cos. (NYSE: BUD) beat expectations on strength of international sales and partner brands.
• Apple Inc. (NASDAQ: AAPL) blew past expectations. See our conference call live blog.
• Avery Dennison Corp.'s (NYSE: AVY) net sales up, EPS down, both due to the Paxar acquisition.
• Baidu.com Inc. (NASDAQ: BIDU) beat expectations, but wariness about its growth potential lingers.
• Boeing Co. (NYSE: BA) beat expectations but lowered its guidance.
• Bristol-Myers Squibb (NYSE: BMY) beat expectations on the strength of Plavix sales.
• CNH Global's (NYSE: CNH) profit nearly doubled, beating estimates by 15%.
• Coach Inc. (NYSE: COH) beat estimates by a penny, but offered a conservative outlook for the holidays.
• Comcast Corp. (NASDAQ: CMCSA) met EPS expectations but cut its cash flow forecast.
• Countrywide Financial Corp. (NYSE: CFC) reported a $1.2 billion loss, but predicts a profit in the next quarter.

Bristol Myers Squibb Co. (NYSE: BMY) opened at $29.21. So far today the stock has hit a low of $29.21 and a high of $29.96. As of 10:35, BMY is trading at $29.93, up $0.19 (0.6%).

The stock has been climbing gently over the past 10 months, reaching a one-year high of $30.55 earlier this month. Jim Cramer believes that this stock could really shoot up because struggling rival Sanofi-Aventis (NYSE: SNY) may be forced to buy BMY to make numbers. People are talking about a bid in the range of $33, but Cramer expects something closer to $40. Recent technical indicators for BMY have been bullish but deteriorating, while S&P gives the stock a 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $25 range. BMY hasn't been below $25 since December and has shown support around $28 recently. This trade could be risky if the FDA find trouble with one of BMY's drugs, but even if that happens, this position could find support around its 200 day moving average, which is currently at $27 and rising.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY. He does control a bullish hedged position on SNY.

Almost every single day day of last week I said the same in the morning, that futures point to a positive start. Yet it seemed the market just couldn't get a break and was hit with one economic news after another that kept bulls at bay. Once again this morning futures are positive, pointing to a higher start for stocks, and hopefully finally ending a six-day losing streak. It would be interesting to see how the market reacts a day before the midterm elections.

Part of this early positive sentiment, undoubtedly has to do with oil prices. This morning, oil prices slipped to below $59 a barrell. This is due partly due to the belief OPEC would have a hard time fulfilling its announcement to cut production and partly because the threats to disrupt production in Nigeria and the U.S. never came to pass. At the same time, OPEC President Edmund Daukoru also said this morning that there is oversupply and warned of further production cuts.

Today there are no economic data due, and this week in general will have little from the economic front. On Thursday, trade balance will be reported and that would be the major report to note. However, a number of Federal Reserve will be speaking today and the market could very well react to that.

In Corporate news:

Some companies due to report today: Anadarko Petroleum Corp. (NYSE:APC) - estimated $1.35 earnings per share, El Paso Corp. (NYSE:EP) - estimated $0.16 earnings per share, RealNetworks Inc. (NASDAQ:RNWK) - estimated $0.22 earnings per share, and XM Satellite Radio Holdings, Inc. (NASDAQ:XMSR) - estimated -$0.46 earnings per share.

Google Inc. (NASDAQ:GOOG) yesterday announced that it will test expansion of its business into offline media and will now be helping customers buy advertisements in 50 U.S. newspapers. More than 100 advertiser were invited to join the three-month test of a Print Ads service that places ads in daily papers such as the New York Times Co. (NYSE:NYT), Gannett Co. (NYSE:GCI) and the Washington Post.

Ryanair Holdings Plc (NASDAQ:RYAAY), Europe's largest low-cost airline, posted a 24% gain in quarterly profit and lifted its 2007 guidance. Shares rose more than 3% in London.

The Wall Street Journal reported this morning that General Motors Corp.'s (NYSE:GM) Rick Wagoner said that a deal between $6 billion to $7.5 billion could be reached soon with Delphi Corp. (OTC:DPHIQ) over GM's contribution on labor costs at auto-parts maker. Wagoner is touring China where GM also displayed the company's hydrogen fuel cell-powered Sequel.

Again, according to the Wall Street Journal the U.S. Justice Department, informally probing anti-competitive behavior in the private equity sector, has requested information from Merrill Lynch's (NYSE:MER) private equity arm.

ImClone Systems Inc. (NASDAQ:IMCL) and Bristol-Myers Squibb Co. (NYSE:BMY) reported mixed results from a pair of Phase III trials of Erbitux, the cancer drug.

In the radio market, in attempt to to defend its eroding market share from satellite radio and iPods, U.S. radio operators said sales of its high-definition radios will expand to Circuit City Stores, Inc. (NYSE:CC), and stations are set to air some 75,000 ads a week pushing HD Digital radio.