The year starts on Wall Street with a merger operation in the biotechnology industry to create a giant in the development of therapies to fight cancer. Bristol-Myers Squibb proceeds to the acquisition of Celgene. The operation is valued at 74,000 million dollars. The purchase will be made in a transaction that will combine cash and the exchange of shares.
When completed, the shareholders of Bristol-Myers will control 69% of the capital of the company that emerges from the merger, in accordance with the agreed terms. The rest will correspond to the owners of Celgene, who saw their titles appreciated more than 31% after the announcement. Last year, Celgene acquired Juno Therapeutics for 9,000 million, specializing in treatments for leukemia.
Bristol-Myers Squibb, which among its medical portfolio has the Opdivo to treat melanomas, ensures that the transaction will create "a company specialized in advanced biopharmacy" that will be dedicated to the development of treatment for patients with cancer, inflammatory diseases, autoimmune or cardiovascular. Celgene hopes to commercialize one shortly against multiple sclerosis.
Giovanni Caforio, its CEO, says that this union will create a leading company in biopharmaceutical innovation and will allow the development of new options for patients. But this type of business marriage also seek to ensure sustained growth of their businesses and respond to the loss of protection of some patents, such as the case of Celgene's Revlimid.
Celgene shares fell by this reason close to 40% during the last year, before the merger was announced. The price Bristol-Myers Squibb pays seems expensive. But the analysts consider that it is a strategic maneuver. The combined company will have nine treatments that annually generate sales of more than 1,000 million dollars.
Mark Alles, Celgene's chief executive, also insists that the merger represents a significant opportunity for long-term growth. The integration will create in parallel synergies that will save about 2,500 million in costs by 2022. The operation must now be approved by the regulatory authorities of the competition.
Once the merger is completed, scheduled for the third quarter, the combined company will become the fourth largest pharmaceutical company in the United States. Bristol-Myers is currently eighth, with annual revenues of 20,800 million in fiscal year 2017. Celgene is followed by the ninth, with 13,000 million in sales. The Revlimid generated 7,100 million in the first nine months of 2018.