SUMMIT, N.J. (AP) - Bristol-Myers Squibb is spending $74 billion on fellow drugmaker Celgene in a deal aimed at stocking the combined company’s development pipeline with cancer, immunology and cardiovascular treatments.
Bristol would gain the cancer treatment Revlimid in the cash-and-stock deal announced Thursday, as well as inflammatory disease treatments and several products close to launching.
The combined company will have nine products with more than $1 billion in annual sales. Bristol’s product portfolio already includes Orencia, an injected drug for rheumatoid arthritis, and the cancer treatment Opdivo.
People were interested in these podcasts
Bristol Chairman and CEO Giovanni Caforio said in a prepared statement that the combination will create a deep product portfolio that drives growth.
It was a hard sell, however, on Wall Street. Shares of Bristol ended Thursday down $6.90, or 13.3 percent, at $45.12, on a day when the Standard & Poor’s 500 lost 2.5 percent. Celgene shares, however, soared $13.79, or 20.7 percent, to $80.43.
Under terms of the deal, shareholders of Celgene Corp., based in Summit, New Jersey, will receive one share of Bristol-Myers Squibb plus $50 in cash for each share they own. They’ll also receive one tradeable contingent value right for each Celgene share, allowing the holder to receive a $9 payment when future regulatory milestones are hit.
The cash-and-stock portion of the deal totals $102.43, based on Wednesday’s closing price of $52.43 for Bristol shares. That represents a premium of nearly 54 percent to Celgene’s closing price of $66.64.
Shareholders of Bristol-Myers Squibb Co., based in New York, would own about 69 percent of the company, with Celgene shareholders owning about 31 percent.
.
Please read our comment policy before commenting.