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By Colin Kellaher
Amgen Inc. (AMGN) on Monday said it agreed to buy Celgene Corp.'s (CELG) psoriasis treatment Otezla for $13.4 billion in cash in a deal that will pave the way for Bristol-Myers Squibb Co. (BMY) to complete its acquisition of Celgene.
Amgen said the deal is worth about $11.2 billion, net of anticipated future cash tax benefits.
Bristol-Myers in January said it would acquire Celgene in a deal valued at about $74 billion, but the U.S. Federal Trade Commission raised anticompetitive concerns related to anti-inflammatory drugs. The companies in June said they would shed Otezla to satisfy the FTC's concerns.
Bristol-Myers on Monday said the sale of Otezla to Amgen is contingent on a consent decree with the FTC and completion of the Celgene acquisition, which the company now expects to occur by the end of the year.
Amgen, a Thousand Oaks, Calif., biotechnology company, said Otezla is a strong strategic fit with its psoriasis and inflammation portfolio and said it expects at least low-double-digit sales growth for the drug, on average, over the next five years.
Amgen, which has been pressured recently by the introduction of copycats to its white blood cell booster Neulasta and calcium reducer Sensipar, noted that Otezla has exclusivity through at least 2028 in the U.S.
Bristol-Myers said it will use proceeds from the Otezla sale to pare its debt load, adding that it plans to focus on deleveraging in the near term to maintain strong investment-grade credit ratings and a ratio of debt to earnings before interest, taxes, depreciation and amortization of below 1.5-times by 2023.
The New York drug maker also raised an accelerated share repurchase program, planned for after the Celgene deal closes, to $7 billion from $5 billion.
Write to Colin Kellaher at firstname.lastname@example.org
(END) Dow Jones Newswires
August 26, 2019 07:34 ET (11:34 GMT)
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