Drug firm Bristol-Myers Squibb snaps up United States rival Celgene for $74bn

Drug firm Bristol-Myers Squibb snaps up United States rival Celgene for $74bn

Drug firm Bristol-Myers Squibb snaps up United States rival Celgene for $74bn

Celgene Corporation, the global biotechnology company based in Summit that discovers, develops and commercializes medicines for cancer and inflammatory disorders, is set to be acquired by Bristol-Myers Squibb in a cash and stock deal valued at approximately $74 billion.

Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. Bristol-Myers emphasized Celgene's innovative new medicines, including the experimental cell-therapy program acquired in the $9 billion Juno Therapeutics takeover previous year.

Celgene's shares rocketed in premarket trading Thursday morning on the deal news, soaring around 32 percent to $88.80. "We look forward to working with the Bristol-Myers Squibb team as we bring our two companies together".

BMS has valued Celgene shares at US$102.43 apiece, a 54 percent premium to the stock's closing price on January 2.

The deal comes a year after Celgene made its own major acquisition, of Seattle-based CAR-T therapy maker Juno Therapeutics.

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Continuing discussion of current price performance, Bristol-Myers Squibb Company has a total market value of 87.44B at the time of writing - representing $1.67B outstanding shares.

Revlimid accounted for $8.2 billion in sales in 2017, almost two-thirds of overall revenues of $13 billion.

The new specialty firm will focus on treating people with serious conditions including cancer, offering nine products with "more than $1 billion in annual sales", the companies said.

According to Reuters' report, Bristol Myers approached Calgene in September 2018 to initiate talks of a purchase. Two investment analysts have rated the stock with a sell rating, thirteen have given a hold rating and seven have given a buy rating to the company's stock.

BMS CEU Giovanni Caforio is quoted as saying the deal is "not about Revlimid", and that the combined companies anticipate six product launches within the next two years. That represents a premium of almost 54 per cent to Celgene's closing price of $66.64.

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"Both of them were coming into this year kind of limping", said Brad Loncar, who runs the Loncar Cancer Immunotherapy ETF. "We think this is a bit of an oversell", Skorney said in a research note.

"Despite more debt, we believe the business has strengthened as a result of the transaction and expect the combined entity to generate substantial cash flow", Standard & Poor's said.

Those drugs include the three treatments whose approval the CVR payment is based on - Celgene's high-profile multiple sclerosis drug ozanimod, lymphoma treatment liso-cel by December 31, 2020 and a CAR-T therapy for multiple myeloma known as bb2121 from a partnership with bluebird bio by March 31, 2021.

Bristol has obtained fully committed debt financing from Morgan Stanley Senior Funding Inc and MUFG Bank Ltd. Kirkland & Ellis LLP is its legal counsel.

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