Bristol-Myers Squibb (BMS) and Celgene have announced that they have entered into a definitive merger agreement under which BMS will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion.

Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. The Boards of Directors of both companies have approved the combination. When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69 percent of the company and Celgene shareholders are expected to own approximately 31 percent.

A speciality biopharma company

The transaction will create a leading focused specialty biopharma company well positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease, states BMS in their press release.

“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” said Giovanni Caforio, M.D., Chairman and Chief Executive Officer of Bristol-Myers Squibb. “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.”

The merged pipelines

The combined company will have nine products with more than $1 billion in annual sales and potential for growth in the core disease areas of oncology, immunology and inflammation and cardiovascular disease. In oncology, the company will have a pipeline for solid and hematologic tumors led by blockbusters Opdivo, Revlimid, Pomylyst and Yervoy. The cardiovascular pipeline will be led by Eliquis and the immunology and inflammation franchise will be led by Orencia and Otezla.

The merged pipelines will also have six expected near-term product launches, including two in immunology and inflammation and four in hematology. These six products represent more than $15 billion in potential revenue, according to BMS.

Caforio will remain as CEO

When the deal is completed, Caforio will continue to serve as chairman and CEO of the combined companies. Two members from Celgene’s board of directors will be added to the Board of Directors of Bristol-Myers Squibb.

BMS also noted that it will aim to find at least $2.5 billion in cost reductions by 2022 as it works on the merger.

Photo of Giovanni Caforio: BMS