Carl Icahn acquires Bristol-Myers shares, adding to activist pressure

NEW YORK — Billionaire investor Carl Icahn has taken a stake in Bristol-Myers Squibb Co. and sees the drug maker as a possible takeover target, according to a report published on Tuesday that sent the company’s shares from a loss to more than 2% higher.

Earlier on Tuesday, Bristol-Myers said it added three directors to its board, a move supported by JANA Partners LLC, an activist investor building a stake in the company’s stock.

Bristol shares were down nearly 2% for much of the day before jumping as high as $57.21 after the Wall Street Journal said Icahn has built a large stake. The report did not identify the size of the stake but said Icahn sees the company as a takeover target, citing anonymous sources.

The shares ultimately gave back most of the gains and closed up 19 cents, or 0.35%, at $54.78.

The addition of new board members comes as Bristol-Myers has fallen behind Merck & Co., Inc. in the key field of immunooncology after its Opdivo drug failed to prolong survival in previously untreated patients with non-small cell lung cancer (NSCLC), the largest cancer market. Merck’s rival drug, Keytruda, did extend survival as a so-called front-line treatment for NSCLC.

Bristol’s weaker competitive position has been reflected in its shares, which are off about 28% since the lung cancer setback last August. Merck shares are up more than 11% over the same period.

Bristol-Myers also disclosed that it expects to post charges of $1.5 billion to $2 billion in connection with a restructuring announced in October. In addition, it announced a $2 billion accelerated share repurchase program to be funded with debt and cash.

Bristol-Myers said company directors and executives met with JANA representatives to understand their views since the firm became a shareholder in late 2016. The board appointments followed those discussions, the company said.

New York-based JANA owned 3.9 million shares of Bristol-Myers as of Dec. 31, a $226 million stake well below 1% of the $92 billion company. According to people familiar with the matter, JANA has substantially increased its stake since January, though it is still below 1% of the outstanding shares. —