Bristol-Myers Squibb has begun 2019 by entering a mega-merger with Celgene, for a price of $74bn (€65.2bn) to be paid down in cash and stock.
The boards of both companies have already approved the deal and BMS noted that it expects merger to be complete in the third quarter of 2019.
The deal will see BMS add blockbuster product Revlimid (lenalidomide) to its oncology portfolio that already includes Opdivo (nivolumab) and Yervoy (ipilimumab).
BMS noted that the combined company would possess nine products that bring in more than $1bn in annual sales.
It also anticipates having six ‘near-term’ launches with revenue potential of $15bn:
- Two in immunology and inflammation, TYK2 and ozanimod
- Four in hematology, luspatercept, liso-cel (JCAR017), bb2121 and fedratinib
BMS also pointed towards a strengthened early-stage pipeline as one of the reasons that the deal has been undertaken, with the potential company holding 50 candidates to progress through the clinic.
Giovanni Caforio, chairman and CEO of Bristol-Myers Squibb said in a statement, “As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches. Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.”
In order to finance the deal, BMS will take on debt financing from Morgan Stanley Senior Funding and MUFG Bank – the rest will be accounted for by available cash and shares.
BMS shareholders will own approximately 69% of the new company and Celgene shareholders will hold 31%. BMS expects cost synergies of $2.5bn by 2022.
At $74bn, the deal dwarfs even Takeda’s recent purchase of Shire for $62bn, which saw the former take on a large debt burden to push the deal through.