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Bristol-Myers Announces Sale of Celgene's Otezla to Amgen
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Bristol-Myers Squibb Company (BMY - Free Report) announced that Celgene Corporation has inked an agreement to sell its plaque psoriasis and psoriatic arthritis drug, Otezla, to Amgen (AMGN - Free Report) . The deal is in connection with Celgene and Bristol-Myers’ merger.
Amgen would pay $13.4 billion in cash for the same. The closing of the divestiture is contingent on Bristol-Myers Squibb and Celgene entering a consent decree with the Federal Trade Commission (FTC) in connection with their pending merger.
Bristol-Myers decided to divest Otezla to close the Celgene acquisition on a timely basis in light of concerns expressed by the FTC.
We remind investors that Bristol-Myers has tyrosine kinase 2 (TYK2) inhibitor, BMS-986165, in its pipeline, which is being evaluated in several autoimmune diseases, including psoriasis. The regulatory agency was concerned about a possible overlap between Otezla and BMS-986165 in the pipeline. Hence, Bristol-Myers decided to sell Otezla.
Otezla raked in more than $1.6 billion of sales in 2018 and was one of the key growth drivers for Celgene, while BMS-986165 is still in development. Sales of the drug are expected to come in around $1.9 billion in 2019.
Bristol-Myers now expects the pending acquisition with Celgene to close by the end of 2019.
In January 2019, Bristol-Myers announced that it will acquire Celgene for $74 billion to boost its oncology portfolio, given the stiff competition for Opdivo from the likes Merck’s (MRK - Free Report) Keytruda. However, the acquisition earlier hit a few roadblocks, with a few large shareholders of Bristol-Myers opposing the merger. The shareholders thought it to be risky and may add significant debt to the balance sheet. Moreover, Celgene’s growth-driving oncology drug, Revlimid, is expected to lose patent protection soon. The acquisition was finally given a green signal in April 2019.
Bristol-Myers plans to prioritize the use of proceeds from the divestiture to reduce debt.
Shares of the company have lost 7.4% in the year so far compared with the industry’s decline of 2.1%.
Concurrently, the company announced an increase to its previously-planned $5-billion accelerated share repurchase to $7 billion.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Bristol-Myers Announces Sale of Celgene's Otezla to Amgen
Bristol-Myers Squibb Company (BMY - Free Report) announced that Celgene Corporation has inked an agreement to sell its plaque psoriasis and psoriatic arthritis drug, Otezla, to Amgen (AMGN - Free Report) . The deal is in connection with Celgene and Bristol-Myers’ merger.
Amgen would pay $13.4 billion in cash for the same. The closing of the divestiture is contingent on Bristol-Myers Squibb and Celgene entering a consent decree with the Federal Trade Commission (FTC) in connection with their pending merger.
Bristol-Myers decided to divest Otezla to close the Celgene acquisition on a timely basis in light of concerns expressed by the FTC.
We remind investors that Bristol-Myers has tyrosine kinase 2 (TYK2) inhibitor, BMS-986165, in its pipeline, which is being evaluated in several autoimmune diseases, including psoriasis. The regulatory agency was concerned about a possible overlap between Otezla and BMS-986165 in the pipeline. Hence, Bristol-Myers decided to sell Otezla.
Otezla raked in more than $1.6 billion of sales in 2018 and was one of the key growth drivers for Celgene, while BMS-986165 is still in development. Sales of the drug are expected to come in around $1.9 billion in 2019.
Bristol-Myers now expects the pending acquisition with Celgene to close by the end of 2019.
In January 2019, Bristol-Myers announced that it will acquire Celgene for $74 billion to boost its oncology portfolio, given the stiff competition for Opdivo from the likes Merck’s (MRK - Free Report) Keytruda. However, the acquisition earlier hit a few roadblocks, with a few large shareholders of Bristol-Myers opposing the merger. The shareholders thought it to be risky and may add significant debt to the balance sheet. Moreover, Celgene’s growth-driving oncology drug, Revlimid, is expected to lose patent protection soon. The acquisition was finally given a green signal in April 2019.
Bristol-Myers plans to prioritize the use of proceeds from the divestiture to reduce debt.
Shares of the company have lost 7.4% in the year so far compared with the industry’s decline of 2.1%.
Concurrently, the company announced an increase to its previously-planned $5-billion accelerated share repurchase to $7 billion.
Bristol-Myers currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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