BMS $74bn Celgene deal to create ‘number one oncology franchise’

The acquisition of Celgene will boost Bristol-Myers Squibb’s commercial portfolio and clinical pipeline and create synergies of $2.5 billion, the firm says.

The new year has started with an M&A bang, with pharma giant Bristol-Myers Squibb (BMS) announcing its intentions to acquire its immune-oncology partner Celgene in a deal valued at $74 billion (€65 billion).

According to Giovanni Caforio, CEO of Bristol-Myers Squibb, four value areas drove the merger. The first is creating leading franchises in oncology, immunology and inflammation and cardiovascular disease, with nine products in its combined portfolio with more than $1 billion in annual sales.

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Already Bristol-Myers Squibb has the number one cardiovascular franchise, Caforio told stakeholders on a conference call, through anticoagulant Eliquis (apixaban). But he also said the deal creates “the number one oncology franchise,” by coupling its products Opdivo (nivolumab) and Yervoy (ipilimumab) with Celgene’s hematologic malignancy drugs Revlimid (lenalidomide) and Pomalyst (pomalidomide).

“The second and really important value driver is that, we have a number of short-term launches happening,” he discussing the merger. He added there will be six launches over the next 12 to 24 months “which will deliver the value of this combination in the short term to shareholders.”

The third driver for the deal are the potential synergies, expected to be worth around $2.5 billion. These will come from SG&A, R&D and manufacturing, the firm said, and will constitute roughly 13% of pro forma combined spend, which BMS said is in line with previous transactions of this size and scope.

Meanwhile the fourth value driver cited by Caforio is the early and mid-stage pipeline, “which is extremely broad and deep across multiple modalities.”

“When you look at it altogether, it is a very unique combination of two companies that bring together a very complementary set of opportunities from all points of view.”

The boards of directors of both companies have approved the merger, though the closing of the deal is subject to shareholder approval and is expected to be completed in the third quarter of 2019.

Leerink analyst Geoffrey Porges noted that “while Celgene’s shareholders are unlikely to reject the offer, Bristol’s could.”

CAR-T

Among the other programs set to be acquired by Bristol-Myers Squibb are several chimeric antigen receptor (CAR) T-cell candidates in Celgene’s pipeline.

Celgene has a partnership in place with bluebird bio, and in March 2018 the firm completed the $9 billion acquisition of Juno Therapeutics CAR T-cell technology and manufacturing capabilities, along with a pipeline of hematology and oncology therapies.

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