JPM: Bristol chief says one-third of Celgene cost cuts will hit in 2020

Giovanni Caforio
Bristol is on track to deliver on its promise to cut $2.5 billion in costs by 2022, and it’ll squeeze out approximately one-third of those costs this year alone, CEO Giovanni Caforio said Monday. (Bristol-Myers Squibb)

SAN FRANCISCO—Last year, Bristol-Myers Squibb stole the show at the J.P. Morgan Healthcare Conference with its $74 billion deal agreement for Celgene. But one year later, with the deal just recently closed, CEO Giovanni Caforio says he feels “even better about our opportunity” than he did when BMS unveiled it.

Bristol is on track to deliver on its promise to cut $2.5 billion in costs by 2022, and it’ll squeeze out approximately one-third of those costs this year alone, Caforio said during a presentation at this year’s JPM confab.

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The New Jersey drugmaker has made “great progress” with integration: Its leadership teams are in place, it’s designed the new company’s operating model, and things are coming together smoothly on the commercial and R&D sides. But in other ways, it’s just getting started.

In terms of integrating BMS and Celgene’s processes and systems—such as those for IT, finance and pricing—“we’re just at the beginning,” Caforio said.

While BMS may have a lot to do in 2020 to fully swallow Celgene, Caforio said he doesn’t expect the effort to distract the pharma giant from its larger priorities, including capitalizing on new launches, executing on its pipeline candidates and—yes, indeed—making new deals. And the way he sees it, Bristol’s 2019 showing “really speaks to our ability to integrate while we continue to deliver on the value drivers.”

RELATED: Questions about BMS-Celgene integration plans? Obviously. Answers? Not so much

One example? BMS’ speedy divestiture of psoriasis med Otezla, which the FTC mandated in order to close the Celgene transaction. The company offloaded the drug to Amgen for $13.4 billion, with analysts largely agreeing that Amgen overpaid.

“I’m pleased with the speed with which we were able to execute that transaction and the value that we received,” Caforio said.

RELATED: Amgen, maker of Enbrel, to pick up Celgene's Otezla for $13.4B. Will FTC hit back?

Caforio also highlighted 2019 progress in protecting the IP for Revlimid, Celgene’s blood cancer heavyweight and a centerpiece of the deal, and in growing already-launched medicines, including next-gen anticoagulant Eliquis.

But the company will have to do more than keep both those efforts up this year if it wants to hit the targets it laid out when it agreed to the deal. Among them: Reap more than $15 billion from near-term launches, including key multiple sclerosis candidate ozanimod.

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