Bristol-Myers Squibb Company (headquartered in New York, New York) and Celgene Corporation (headquartered in Summit, New Jersey) have entered into a definitive merger agreement under which Bristol-Myers Squibb 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 US $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.
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.
Based on the closing price of Bristol-Myers Squibb stock of US $ 52.43 on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders at closing is valued at US $ 102.43 per Celgene share and one CVR. When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69% of the company, and Celgene shareholders are expected to own approximately 31%.
“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, MD, 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,” Caforio added.
“We are impressed by what Celgene has accomplished for patients, and we look forward to welcoming Celgene employees to Bristol-Myers Squibb. Our new company will continue the strong patient focus that is core to both companies’ missions, creating a shared organization with a goal of discovering, developing and delivering innovative medicines for patients with serious diseases. We are confident we will drive value for shareholders and create opportunities for employees,” Caforio continued.
Leading in innovation
“For more than 30 years, Celgene’s commitment to leading innovation has allowed us to deliver life-changing treatments to patients in areas of high unmet need. Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company,” noted Mark Alles, Chairman and Chief Executive Officer of Celgene.
“Our employees should be incredibly proud of what we have accomplished together and excited for the opportunities ahead of us as we join with Bristol-Myers Squibb, where we can further advance our mission for patients. We look forward to working with the Bristol-Myers Squibb team as we bring our two companies together.”
According to investment analyst, the combination of Bristol-Myers Squibb and Celgene may offer a number of strategic benefits. Both companies manage leading franchises with complementary product portfolios provide enhanced scale and balance. As a result, the new company will creates a leading oncology franchises in both solid tumors and hematologic malignancies led by Bristol-Myers Squibb’ nivolumab (Opdivo®) and ipilimumab (Yervoy®) as well as Celgene’s lenalidomide (Revlimid®) and pomalidomide (Pomalyst®) The combined company also creates a top five immunology and inflammation franchise led by abatacept (Orencia®) and apremilast (Otezla®) and a leading cardiovascular franchise led by apixaban (Eliquis®), an anticoagulant for the treatment of venous thromboembolic events and the prevention of strokes in people who have atrial fibrillation.
In addition, the combined company will have nine products with more than US $ 1 billion in annual sales and significant potential for growth in the core disease areas of oncology, immunology and inflammation and cardiovascular disease.
Near-term launch opportunities representing greater than US $ 15 billion in revenue potential. The combined company will have six expected near-term product launches, including two in immunology and inflammation, TYK2 (tyrosine kinase 2) and ozanimod (RPC-1063; an investigational oral, selective sphingosine 1-phosphate (S1PR1) and 5 (S1PR5) receptor modulator currently in phase III clinical trials for the therapy of relapsing multiple sclerosis and ulcerative colitis) and four in hematology and luspatercept, an investigational treatment option for anemia in beta thalassemia and myelodysplastic syndromes being developed by Acceleron Pharma (headquartered in Boston, MA) in collaboration with Celgene.
Advances in genetic engineering as well as a far better understanding of the human genome, have advanced the development of engineered T cells or chimeric antigen receptor (CAR) T-cell therapy.
Celgene development program involves the development of a number of CAR-T therapies, including the CD19-directed chimeric antigen receptor (CAR) T-cell therapy lisocabtagene maraleucel (JCAR017; liso-cel) which is showing promising response rates in patients with high-risk diffuse large B-cell lymphoma (DLBCL)
Another program involves the anti B-cell maturation antigen (BCMA) CAR T-cell therapy bb2121, which has shown impressive data, most notably a median progression-free survival of 11.8 months for patients with relapsed/refractory disease. Celgene is developing the investigational agent bb2121 in collaboration with Bluebird Bio.
Acquisitions and alliances
In January 2018 Celgene acquired Juno Therapeutics (headquartered in Seattle, WA) for approximately US $9 billion (7.4 billion Euro). The company is a pioneer in the development of CAR T-cell and TCR (T cell receptor) therapeutics with a broad, novel portfolio evaluating multiple targets and cancer indications. One of the newer CAR T-cell therapies, being developed by Juno Therapeutics is JCARH125, an investigational BCMA-targeting CAR T-cell therapy is currently in a phase I/II trial (NCT03430011). This investigational agent product is also targeting BCMA in relapsed/refractory multiple myeloma.
At the time of Celgene’s acquisition of Juno Therapeutics, Mark Alles said that “The acquisition of Juno [would] builds on [the companies] shared vision to discover and develop transformative medicines for patients with incurable blood cancers.”
In October 2017 Celgene entered in in a long-term strategic alliance with Nimbus Therapeutics (headquartered in Cambridge, Massachusetts) to develop programs for patients with autoimmune disorders. As part of that agreement Nimbus was responsible for preclinical effort targeting Tyk2, a signal-transduction kinase for key pro-inflammatory cytokine receptors, including IL-23, IL-12 and type-I interferons.
Because of its central role in the inflammatory response, Tyk2 is a high-potential target for the treatment of autoimmune disorders including rheumatoid arthritis, lupus, Crohn’s disease, psoriasis and multiple sclerosis. The alliance also covers Nimbus’ preclinical small-molecule STING (stimulator of interferon genes) antagonist program, which seeks to block the role played by STING in the activation of the innate immune system in lupus and other interferonopathies.
In January 2018 Celgene also acquired Impact Biomedicines (headquartered in San Diego, CA), which is developing its sole clinical candidate, fedratinib, an orally available and highly selective inhibitor of Janus kinase 2 (JAK2) for the treatment of patients with myelofibrosis (MF) and polycythemia vera (PV).
Celgene acquire Impact Biomedicines for US $7 billion, subject to specific milestones associated with regulatory hurdles and sales performance of the Impact’s lead development product.
Fedratinib, which was initially owned by Sanofi, has an extensive clinical development program including MF, PV, essential thrombocytopenia (ET), and solid tumors. The investigational drug candidate has demonstrated statistically significant improvements in the primary and secondary endpoints of splenic response and total symptom score, respectively, in a randomized, placebo-controlled, Phase III pivotal trial (JAKARTA-1) in treatment-naïve patients.
Combined commercial capabilities
According to analysts, these launches leverage the combined commercial capabilities of the two companies and will broaden and enhance Bristol-Myers Squibb’s market position with innovative and differentiated products. This is in addition to a significant number of lifecycle management registrational readouts expected in Immuno-Oncology (IO).
Early-stage pipeline builds sustainable platform for growth. The combined company will have a deep and diverse early-stage pipeline across solid tumors and hematologic malignancies, immunology and inflammation, cardiovascular disease and fibrotic disease leveraging combined strengths in innovation. The early-stage pipeline includes 50 high potential assets, many with important data readouts in the near-term. With a significantly enhanced early-stage pipeline, Bristol-Myers Squibb will be well positioned for long-term growth and significant value creation.
Powerful combined discovery capabilities with world-class expertise in a broad range of modalities. Together, the Company will have expanded innovation capabilities in small molecule design, biologics/synthetic biologics, protein homeostasis, antibody engineering and cell therapy. Furthermore, strong external partnerships provide access to additional modalities.
The transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the satisfaction of customary closing conditions and regulatory approvals. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019.
Last Editorial Review: January 3, 2019
Featured Image: Celgene Headquarters. Courtesy: © 2010 – 2019 Celgene. Used with permission.
Copyright © 2010 – 2019 Sunvalley Communication, LLC. All rights reserved. Republication or redistribution of Sunvalley Communication content, including by framing or similar means, is expressly prohibited without the prior written consent of Sunvalley Communication. Sunvalley Communication shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Onco’Zine, Oncozine and The Onco’Zine Brief are registered trademarks and trademarks of Sunvalley Communication around the world.