NEW YORK (CNNMoney.com) - Bristol-Myers Squibb has a decent pipeline but 2006 won't be a growth year, analysts said, because the drug maker is unlikely to plug the impending sales vacuum of its second-biggest earner Pravachol any time soon.

"I think that's the big challenge: they have to convince the investment community that there's going to be a growth story after Pravachol," said Scott Henry, analyst for Oppenheimer, referring to the four-hour analyst meeting that Bristol-Myers is holding near its New York City headquarters today.

Pravachol, a cholesterol-lowering drug that totaled $2.6 billion in 2004 sales, is losing patent protection in 2006, a year that isn't garnering high expectations from analysts.

"You never fill a gap in a single year," said Anthony Butler, analyst for Lehman Brothers, referring to the impending sales gap of Pravachol. "It's mathematically impossible."

Bristol-Myers chief executive officer Peter Dolan referred to 2006 as a year of "strategic transition" in a press release this morning.

"We expect to be in a position to achieve a new period of sustainable revenue and earnings growth, starting in 2007 –based on our portfolio of important new marketed products, as well as a productive R&D pipeline," said Dolan.

Bristol-Myers said it cut annual expenses by $200 million in 2004 and again in 2005, primarily through "realigning" its sales force in the U.S. and Europe and "restructuring" drug development. The company wants to continue slashing costs, and is forecasting cuts of $500 million in 2007 and $100 million in 2008.

The company faces another problem. The FDA wants more information about the cardiovascular risks of Pargluva, a potential diabetes drug also known as muraglitazar, before it can complete its review, dampening analysts' expectations for sales. Also, Bristol-Myers' top earner, Plavix, a $3.3 billion drug that keeps platelets from clotting to help prevent strokes, is facing patent litigation ahead of its 2011 expiration, which tends to make investors nervous.

"The stock might not reflect fair value until that is resolved," said Butler, the Lehman Brothers analyst, referring to the Plavix litigation.

Bristol-Myers has experienced stomach-churning stock volatility and a price decline of 8 percent over the last year. But the company is betting on its pipeline of experimental cancer drugs, like MDX-010 for the treatment of metastatic melanoma and dasatinib for the treatment of a specific form of leukemia, to pick up sales. The company is also testing belatacept, for the treatment of solid organ transplant rejection. The company has filed new a drug application for Orencia, also known as abatacept, for the treatment of rheumatoid arthritis and has filed an application for EMSAM as an antidepressant.

Butler, the analyst for Lehman Brothers, projects peak annual sales of $1 billion for Orencia, assuming approval from the FDA, and $750 million for dasatinib. Company sales totaled $19.4 billion in 2004.

"I think they've got a reasonable pipeline," said Butler. "The majority of it is in oncology, expect for Orencia, and we've seen that's Bristol's bread and butter."

To read more about dasatinib, click here.