Celgene, the prescription drugmaker selling itself to Bristol-Myers Squibb for $74 billion, agreed to spin off arthritis medicine Otezla to satisfy anticompetition concerns raised in a Federal Trade Commission review of the deal.
The agency, which examines corporate takeovers to identify and prevent combinations that would hurt consumers by pushing up prices, is still reviewing the buyout, Bristol-Myers said in a statement Monday, and the companies will have to sign a consent decree on the plan to sell Otezla. Celgene had predicted the drug, used to treat psoriasis and psoriatic arthritis, would garner as much as $1.9 billion in sales this year.
Bristol-Myers, which originally planned to complete the Celgene transaction before the end of September, now says it may not be finalized until early 2020. The company said in January that the deal would give it access to a pipeline of new treatments for diseases including multiple sclerosis amid growing federal scrutiny of prescription drug prices.
“When you look at the pipeline and scientific capabilities of Celgene, we see tremendous opportunities for transformational medicines,” Bristol-Myers CEO Giovanni Caforio said in a January conference call to investors. The merged company will have a leading portfolio of cancer treatments, with drugs like Revlimid, and maintain an array of immunology and inflammation medicines despite the Otezla sale.
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.
The merger would strengthen both firms as re-energized congressional Democrats target patents that allow brand-name drugmakers to profit from blockbuster medications for a decade or longer and President Trump fights to lower prices.
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 in 2018, the administration published a blueprint with strategies for improving competition and negotiating lower list prices.
Bristol-Myers fell 6.8% to $46 in New York trading on Monday, while Celgene tumbled 5% to $94.01.
