£58bn deal creates pharma giant

BRISTOL-MYERS SQUIBB Co said yesterday it would buy Celgene Corp for about $74bn (£58.6bn), creating one of the biggest pharmaceutical companies and combining two significant cancer drug businesses.

“This deal would seem to follow a familiar pattern of pressured large-cap biotechs finding an exit through acquisition by a larger buyer,” Piper Jaffray analyst Christopher Raymond said in a research note.

Other analysts said it raised the possibility of a new era of major drug deals. Bristol expects to achieve the $2.5bn in cost savings by 2022 and said the deal will add more than 40 per cent to its earnings in the first year after the deal closes, expected in the third quarter of 2019.

Under terms of the deal, Celgene shareholders will receive one Bristol-Myers Squibb share and $50 in cash for each share held, or $102.43 per share, a premium of 53.7 per cent to Celgene’s Wednesday close.

Celgene shareholders will also receive a so-called CVR payment, or contingent value right, of $9 if three treatments in development achieve regulatory approval.

Bristol chief executive officer Giovanni Caforio said during a conference call that the combination would create the top oncology franchise and a top-five immunology franchise with strength in both solid tumour and blood cancers.