Bristol-Myers Squibb is acquiring Summit-based Celgene for $74 billion. BMS is headquartered in New York with major facilities in Lawrenceville and New Brunswick. The cash-and-stock transaction has been approved by the boards of both companies.
According to analysts, BMS likely targeted Celgene because of the promising cancer drugs it is developing, which target blood cancers. BMS’s leading drug is Opdivo, an immunotherapy agent that has sales of about $4.5 billion a year, accounting for about 30 percent of the company’s revenue.
“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 through high-value innovative medicines and leading scientific capabilities. With complementary areas of focus, the combined company will operate with global reach and scale, maintaining the speed and agility that is core to each company’s strategic approach,” a BMS press release stated.
Giovanni Caforio, CEO of BMS, said the combined company will have a broad and diverse pipeline of drugs. “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,” he said.
In addition to combining the drug pipelines and research capabilities, company leaders expect to be able to gain “cost synergies” of $2.5 billion by 2022 due to the merger.
The merger has sparked criticism. When the news of the merger broke, Senator Elizabeth Warren of Massachusetts tweeted: “Giant drug companies only care about one thing: raking in profits on the backs of patients. Mergers that mean more money for drug company CEOs while patients pay the price are not a solution to skyrocketing drug costs.”
Warren was echoing the FDA’s criticism of Celgene. The agency gave Celgene the top spot on a “name and shame” list that called out companies for blocking generic competition. Celgene has successfully used patent law to protect its $8 billion-a-year cancer drug Revlimid from competition. It is currently embroiled in a legal battle over whether a generic version of Revlimid can be made in 2021 or in 2022.