There’s a lot of talk on Wall Street and in Big Pharma executive suites that heavy spending on research and development doesn’t pay off. Not so fast, says Bristol-Myers CEO Lamberto Andreotti. Today’s approval of ipilimumab for the deadly skin cancer called metastatic melanoma shows that the expense can be worth it, Andreotti tells the Health Blog. “My R&D pays,” he says. “It pays not only because we have results, but because we invest our money very carefully.” As Big Pharma labs have failed recently in discovering new blockbusters, number-crunchers at McKinsey & Co. and elsewhere have figured there’s a negative return on the industry’s multibillion-dollar spending on R&D. One result: Companies such as Pfizer Inc.  have been closing laboratories and laying off scientists, while expanding in less-risky busineses like animal health and consumer products. Beginning under

ex-CEO James Cornelius and now under Andreotti, Bristol-Myers has taken a different tack, shedding its non-pharma businesses like its Mead Johnson nutritionals unit. The firm has shrunk so much it’s no longer Big Pharma. It’s a mid-size company, focused strictly on pharmaceuticals. That doesn’t mean Bristol-Myers hasn’t tried to spread its risks, Andreotti says, but it has done so by developing drugs for a range of different diseases using different approaches, rather than by pursuing various kinds of businesses. Ipilimumab, which will be sold as Yervoy, is one of five new therapies that Bristol-Myers hopes to get approved by the end of next year. Among the others are drugs for diabetes, blood clotting and organ transplants. Today’s green-light from the FDA “means that the strategy works,” Andreotti says.

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R&D can pay, Bristol-Myers CEO says