April 26 (Bloomberg) -- Bristol-Myers Squibb Co. named interim Chief Executive Officer James Cornelius to the job until 2009, fueling speculation he is preparing to sell the drugmaker.

Cornelius, 63, replaced the ousted Peter Dolan in September and until today said he didn't want the job permanently. Last year he engineered the $27.5 billion sale of Guidant Corp. to Boston Scientific Corp.

``Given his track record, the limited term of his appointment, and his previous lack of interest in the job on a permanent basis, investors may not rule out the possibility that the company may pursue strategic options such as a sale,'' said Roopesh Patel, an analyst with UBS Financial Services Inc. in New York, in a telephone interview today.

Bristol-Myers reported today that first-quarter profit beat estimates. The results suggest the company is rebounding from the introduction of cheaper generic competition last year for its biggest-selling product, the heart pill Plavix. Cornelius also signed a $1 billion accord with Pfizer Inc. to speed development of a replacement for Plavix, whose patent expires in 2011.

Pfizer will pay Bristol-Myers $250 million up front and as much as $750 million later to develop the blood-thinning drug apixaban, used to prevent heart attacks. While the deal will help Bristol-Myers market the product because of Pfizer's sales force, the two companies will split the profits.

Shares Decline

Bristol-Myers shares declined 47 cents, or 1.6 percent, to $29.23 at 4:01 p.m. in New York Stock Exchange composite trading. The stock climbed 17 percent in the past 12 months, fueled in part by speculation the company would soon receive a takeover offer.

``The flurry of news and solid first-quarter performance highlight Bristol's prospects as a stand-alone company,'' said Chris Shibutani, an analyst with J.P. Morgan in New York, in a note to clients. ``Today's announcement of James Cornelius as a permanent CEO through May 2009 will likely remove some of the premium valuation for a near-term takeover.''

Net income dropped 3.4 percent to $690 million, or 35 cents a share, from $714 million, or 36 cents, a year earlier, the company said today in a statement. Profit excluding certain costs was 38 cents a share, beating the 24-cent average estimate of 13 analysts in a Bloomberg survey.

Revenue fell 4.2 percent to $4.5 billion as Plavix sales declined 5 percent to $938 million in the quarter. Apotex Inc., a Canadian maker of generic drugs, sold at least a six-month supply of Plavix copies last August before a U.S. judge ordered a halt. Fourth-quarter Plavix sales plunged 53 percent.

``We are trying to run the business as a free-standing, independent company and do the right thing for shareholder value,'' Cornelius said today during a conference call with investors.

Plavix Hangover

Residual supplies of generic Plavix will continue to affect second-quarter earnings, Bristol-Myers said. Plavix accounted for a third of annual revenue before the generic competition.

The antitrust bureau of the New York Attorney General's office on April 13 subpoenaed documents related to an agreement Dolan made with Apotex to delay generic Plavix, Bristol-Myers disclosed today. Dolan was ousted over the Apotex accord.

A U.S. patent trial over Plavix finished in February. Apotex argued that the patent is invalid and unenforceable. Bristol- Myers and its marketing partner, France's Sanofi-Aventis SA, said the patent covers the main ingredient in Plavix, clopidogrel bisulfate. The judge hasn't issued a ruling yet.

Forecast Raised

The company raised its full-year profit forecast to $1.24 to $1.34 a share from a January projection of $1.12 to $1.22. The new forecast compares with a $1.27 average estimate in a Bloomberg survey of 19 analysts.

Sales of the antipsychotic drug Abilify rose 29 percent to $366 million in the first quarter. Sales of the HIV treatment Reyataz grew 27 percent to $263 million. Avapro for hypertension increased 16 percent to $270 million.

Sanofi-Aventis SA, based in Paris, is a partner with Bristol-Myers on Plavix and Avapro.

``We continue to think that a potential deal may still happen at some point and the most likely bidder remains Sanofi- Aventis,'' said analyst Timothy Anderson, with Prudential Financial in Menlo Park, California, in a note to investors.

``Bristol-Myers' decision to appoint James Cornelius as a permanent CEO will do little to stop the investment community's general belief that the company will be sold,'' Anderson said.

Cornelius at Guidant

Cornelius was chairman and interim chief executive officer of the heart device maker Guidant, sold to Boston Scientific after a bidding war with Johnson & Johnson. His subsequent appointment as interim chief contributed to speculation that Bristol-Myers might be up for sale.

``I don't think this is going to end speculation about the company's independence,'' said Michael Krensavage, an analyst at Raymond James & Associates, in an interview. ``If another company is going to offer money for Bristol-Myers, they are going to have to pay more'' with Cornelius at the helm, he said.

To contact the reporters on this story: Lisa Rapaport in New York at Lrapaport1@bloomberg.net; Michelle Fay Cortez in New York at mcortez@bloomberg.net.

Last Updated: April 26, 2007 16:49 EDT