1. Bristol-Myers Squibb/Celgene

Bristol-Myers Squibb
On Nov. 20, Bristol-Myers closed a $74 billion takeover that officially put an end to the 34-year run of Celgene. (Bristol-Myers Squibb)

Bristol-Myers Squibb/Celgene
Deal value:
$74 billion
Date announced: Jan. 3, 2019

The year 2019 kicked off with the biopharma industry’s largest acquisition proposal ever: Bristol-Myers Squibb unveiled a cash-and-stock deal for Celgene valued at $74 billion.

While the $102.43-per-share price marked a handsome 54% premium over Celgene’s previous close—a big win for the biotech’s shareholders—it still came relatively cheap for Bristol-Myers. About 40% of Celgene’s market value had been wiped out in 2018 amid clinical setbacks and lackluster financial performance, most notably an FDA refusal-to-file for potential multiple sclerosis (MS) blockbuster ozanimod.

For a deal of this size, we should probably have foreseen some of the speed bumps to come.

Dissenting voices soon emerged. Activist investor Starboard Value publicly condemned the transaction as “poorly conceived and ill-advised.” Wellington Management, BMS’ largest institutional shareholder at the time with about 8% of the pharma’s shares, also labeled the buyout “risky,” arguing that the tie-up would not create a business that “secures differentiated science and broadens the future revenue base.”

Then antitrust regulators piled on.

The acquisition creates the globe's largest oncology franchise. With BMS’ checkpoint inhibitors Opdivo and Yervoy and Celgene’s myeloma therapies Revlimid and Pomalyst, cancer drugs are expected to make up $23 billion of the combined company’s annual revenue of $33 billion.

But the U.S. Federal Trade Commission (FTC) also had eyes on a different portfolio: the immunology business. The agency wondered whether housing Celgene’s fast-growing Otezla together with BMS’ investigational TYK-2 inhibitor BMS-986165 would give the new firm too much control over the psoriasis market.

The buyout managed to clear both concerns.

Industry watchers noticed that the opponents didn’t have enough support to scuttle the deal to begin with, and backing from the two powerful proxy advisory firms, Institutional Shareholder Services and Glass Lewis, effectively stopped Starboard from rallying rebels. At a special shareholder meeting in April, more than 75% of votes went in favor of the deal.

RELATED: Bristol-Myers' $74B Celgene buy wins antitrust nod in FTC party-line split vote

As for the FTC, the combo won approval after Celgene agreed to sell Otezla to Amgen for $13.4 billion. The forced selloff surprised analysts when it was unveiled in June, but, as we now know, it only heralded greater antitrust review of biopharma deals in 2019.

On Nov. 20, Bristol-Myers closed the takeover, officially putting an end to Celgene's 34-year run. Along the way, the legacy Celgene portfolio has turned up some positive news.

First up, applications for ozanimod in relapsing forms of MS have been accepted by regulators in both the U.S. and Europe, setting up potential approvals next year. The drug could generate over $1 billion in MS alone, Barclays analysts have estimated, and it’s also in phase 3 testing for inflammatory bowel disease.

Earlier-than-expected copycats to top-seller Revlimid had also been a potential thorn in Celgene’s side. But the U.S. Patent and Trademark Office’s two moves in February and March ended any competitor’s bid to launch generics before 2023. The old myeloma stalwart is still ponying up growth and on track to reach $123.6 billion in cumulative sales by 2024, according to a recent EvaluatePharma report.

Two other key late-stage drugs, JAK inhibitor Inrebic (fedratinib) and blood disease drug Reblozyl (luspatercept), won FDA go-aheads in myelofibrosis and beta-thalassemia, respectively. The remaining two among the “Big 5” drugs that form BMS’ case for buying the Big Biotech are CAR-T therapies: Bluebird bio-partnered bb2121 and Juno Therapeutics’ liso-cel (JCAR017), both of which have posted encouraging results.

Because of the deal, meanwhile, Bristol-Myers in June shuffled its executive ranks. Former BMS Chief Scientific Officer Tom Lynch stepped down as the company split R&D functions into two units: Research & Early Development, headed by Celgene vet Rupert Vessey; and Drug Development, led by newly recruited Samit Hirawat from Novartis. Celgene Chief Financial Officer David Elkins is set to replace BMS’ retiring Charlie Bancroft in 2020.

1. Bristol-Myers Squibb/Celgene

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