Bristol-Myers Finds a $74 Billion Biotech Bargain
Celgene, even after some stumbles, has a number of promising medicines and will boost the pharma giant’s growth prospects at a reasonable price.
Big biotech.
Photographer: Kristoffer Tripplaar/SIPA
During the past 16 months, Celgene Inc. has gone from biotech darling to pariah after a series of research fumbles. On Thursday, Bristol-Myers Squibb Co. — which has had its own share-price stumbles after cancer setbacks — rode to Celgene’s rescue and possibly its own with a $74 billion dollar cash-and-stock deal.
Celgene is cheap for a reason, and this is still a gamble. But Celgene has valuable assets that may yield more under different management; Bristol-Myers, meanwhile, will vault from R&D laggard to one of the industry’s most exciting firms. Its shares declined early, perhaps reflecting investor surprise. But this deal adds major cash flow and excitement for Bristol-Myers at what may end up being a good price.