Bristol-Myers Squibb agreed to buy rival Celgene for $74 billion, gaining access to a pipeline of new treatments for diseases including multiple sclerosis, amid growing federal scrutiny of prescription drug prices.
Celgene investors will receive a share of Bristol-Myers and $50 cash for each share of the Summit, N.J.-based company along with the right to a payment of $9 per share if the U.S. Food and Drug Administration approves three drugs currently in development, the companies said Thursday. Executives expect the deal to be finalized before the end of September.
“When you look at the pipeline and scientific capabilities of Celgene, we see tremendous opportunities for transformational medicines,” Bristol-Myers CEO Giovanni Caforio told investors on a conference call. The merged company will have a leading portfolio of cancer treatments, with drugs like Revlimid and Opdivo, as well as an array of immunology and inflammation medicines, such as psoriasis drug Otezla.
“Our strategy is centered on combining the innovation and agility of biotech and the scale and flexibility of traditional pharma,” Caforio said. “It’s also being focused on key therapeutic areas with high unmet medical need and a strong cultural foundation to help patients in their fight against serious diseases.”
The merger would strengthen Bristol-Myers and Celgene as the pharmaceutical industry grapples with growing pressure from Washington to lower prescription-drug costs.
Re-energized congressional Democrats are seeking to target patents that allow brand-name drugmakers to profit from blockbuster medications for a decade or longer, and President Trump has made medicine prices a focal point of his administration.
During Trump’s first year in office, the FDA approved the most generic drug applications ever, according to the White House. The president signed legislation ending so-called gag clauses that kept pharmacists from telling patients when it would be cheaper to pay for medicines out of their own pockets, and last May, the administration published a blueprint with strategies for improving competition and negotiating lower list prices.
“We’re doing things that nobody was, let’s say — because I’m speaking on behalf of all of us — bold enough to do, and they’re going to have a tremendous impact,” Trump said at the U.S. Department of Health and Human Services in October.
Bristol-Myers fell 14 percent to $45.17 in New York trading after the announcement. Celgene climbed 24 percent to $82.79.
“It’s very early with respect to thinking about how policy may evolve in the U.S.,” Caforio said, “but I actually feel good about having nine assets with over $1 billion in sales.”
