Bristol-Myers to acquire Celgene in $74B deal
Bristol-Myers Squibb said Thursday that it would buy Celgene, a maker of cancer-fighting drugs, in a cash-and-stock deal valued at $74 billion, the first major pharmaceutical deal of 2019.
Between them, the two companies produce nine drugs with annual sales of more than $1 billion apiece, Bristol-Myers said in a statement.
Bristol-Myers shareholders will own 69 percent of the combined entity; Celgene shareholders will own the rest. Celgene shareholders will get one Bristol-Myers share and $50 in cash for each Celgene share. The deal values Celgene shares at $102.43 apiece, a 53.7 percent premium on the stock’s closing price Wednesday.
The deal, which both companies’ boards have approved, will help the drugmakers advance their work in oncology, cardiovascular disease, immunology and inflammation, Bristol-Myers said in its statement. Celgene is known for its blockbuster Thalomid and Revlimid cancer medicines.
“We are very excited about this,” said Dr. Giovanni Caforio, CEO and chairman of BristolMyers.
Shares of Celgene, which is based in Summit, N.J., were up around 25 percent by midday Thursday, while shares of BristolMeyers, which has its headquarters in New York, were down 13 percent.
The transaction comes after a rocky period for Celgene. Its share price fell about 40 percent over the past year amid concerns it was relying too heavily on Revlimid. The drug faces a so-called patent cliff, when its patents will expire and cheaper generic rivals could enter the market.
Celgene, citing concerns for patient safety, has resisted sharing Revlimid samples with potential rivals. Celgene tops a Food and Drug Administration list meant to shame companies trying to block such competition. The company has also been criticized for raising the prices of Revlimid and other medications, and it has had setbacks in its drug development pipeline.
In 2017, Celgene, without acknowledging wrongdoing, agreed to pay $280 million to the federal government, 28 states and the District of Columbia to settle claims that it had marketed Thalomid and Revlimid for unapproved uses.
Last January, Celgene agreed to pay up to $7 billion to acquire the biotechnology company Impact Biomedicines in hopes of expanding its presence in the market for blood-disease drugs. Shortly after that, Celgene announced a $9 billion deal to buy Juno Therapeutics, a startup that is developing potentially groundbreaking cancer treatments.
Like Celgene, Bristol-Myers has focused on cancer treatments. Its products include the drugs Opdivo and Yervoy, which were among the first immunotherapy drugs to use the body’s immune system to fight cancer. They are also expensive, costing $100,000 a year.
Sales of Opdivo have lagged behind a competing Merck drug, Keytruda. In 2016, Opdivo failed as an initial treatment for lung cancer in a clinical trial, causing BristolMyers’ stock price to sink.
The deal, which requires shareholder and regulatory approval, is expected to close in the third quarter.