Urges Shareholders to Vote “FOR” the Proposed
Transaction on the WHITE Proxy Card
Bristol-Myers Squibb Company’s (NYSE:BMY) Board of Directors
today sent an open letter to the Company’s shareholders regarding
the previously announced definitive merger agreement with Celgene
Corporation (NASDAQ:CELG). In addition to its March 19 investor
presentation, the Company today also made available on
Bristol-Myers Squibb’s website at www.bestofbiopharma.com and later
today will file with the Securities and Exchange Commission (SEC)
an investor presentation providing an overview of Bristol-Myers
Squibb’s ability to derive value from Celgene’s pipeline and a Fact
Sheet providing additional detail on key benefits of the
transaction.
The full text of the letter from the Board of Directors to
shareholders follows:
Dear Fellow Shareholder:
The Board of Directors of Bristol-Myers Squibb unanimously and
strongly supports the proposed acquisition of Celgene. This
transaction represents a unique opportunity to create a stronger
Bristol-Myers Squibb and deliver significant value for all
shareholders. The combined company will be stronger today, and
better positioned for sustainable long-term growth. We disagree
with those shareholders that have expressed concerns with some
aspects of the transaction. Your Board has conducted a rigorous
evaluation process, and is highly confident that this is the best
strategic option for the Company at this time. We ask for your
support, and recommend that you vote your shares “FOR” the proposed
transaction with Celgene.
Bristol-Myers Squibb has long been one of the world’s leading
global biopharmaceutical companies whose mission is to discover,
develop and deliver innovative medicines that help patients prevail
over serious diseases. We believe this transaction is the best
option to advance that mission, and to continue to deliver
innovative medicines to our patients as a means to create long-term
value for our fellow shareholders.
Our strategy has involved creating some of the leading
franchises in the world from both internally developed and
externally acquired sources. Leveraging our strong
commercialization capabilities, we have developed five products
that each currently drive over a billion dollars in annual sales,
including two of the 10 largest selling drugs in the pharma
industry in 2018.
By successfully executing this strategy, we have delivered
financial and operational outperformance, including consistent and
peer-exceeding increases in revenue, earnings and margins over the
last five years. Our acute focus on sustainable growth has resulted
in Bristol-Myers Squibb generating 60% of 2018 sales from new
products launched over the last five years. The acquisition of
Celgene takes the Company to its next chapter in a way that is
fully aligned with this strategic foundation.
Bristol-Myers Squibb has transformed its product portfolio more
than once, by investing internally and externally with foresight
focused on our long-term growth prospects. Our business development
effort has been grounded in three main pillars: (1) strategic
alignment with therapeutic areas we know well, (2) compelling
science focused on transformational medicines and (3) financial
discipline. We believe the Celgene acquisition fits very well with
these three pillars, as outlined below.
Through our broad development program and best-in-industry
commercial execution, Bristol-Myers Squibb has successfully built
two strong growth franchises, Eliquis and Opdivo, that currently
represent ~60% of our total sales and have significant opportunity
for further growth. While we expect Eliquis and Opdivo to maintain
their growth well into the next decade, we are conscious of the
fact that in our industry science is always evolving, product
development cycles are long and these products will face eventual
losses of exclusivity (Eliquis in 2026 and Opdivo beginning in
2028). As stewards for our shareholders and our patients, the Board
and management team understand that now is the time to ensure that
we will continue to have a robust pipeline for future growth.
Accordingly, as part of our annual comprehensive strategic
review process focused on sustaining long-term growth,
Bristol-Myers Squibb evaluated a full range of business development
opportunities. The process was overseen by a Board comprised of
directors with substantial operating experience, financial acumen,
scientific expertise and investor perspectives, 10 of whom are
independent including five directors who have joined the Board in
the past three years.
Having reviewed a full range of opportunities, from small
collaborations to transformational combinations, we identified
Celgene as by far the most compelling opportunity for Bristol-Myers
Squibb and its shareholders, given its strategic fit in therapeutic
areas we know well, attractive value, and its unique late-stage
candidates and diversified but complementary Phase 1 and 2
pipeline. The timing of the transaction was also favorable both in
the near-term, as we were able to secure a very favorable price,
and for the long-term, as Bristol-Myers Squibb will be strengthened
and diversified (focused within our chosen therapeutic areas of
oncology and immunology) in an increasingly competitive
environment.
In short, the Board firmly believes that the Celgene acquisition
is the right transaction at the right time for our
shareholders.
A POWERFUL VALUE
CREATION OPPORTUNITY FOR OUR SHAREHOLDERS
As described in greater detail in the Fact Sheet regarding this
transaction, our March 19 investor presentation and our
presentation regarding our ability to deliver value from Celgene’s
pipeline,1 the Celgene transaction will deliver compelling value to
all Bristol-Myers Squibb shareholders. The transaction will
deliver:
- Enhanced product leadership: The
combined company will be #1 in oncology, #1 in cardiovascular and
top 5 in immunology and inflammation, all of which are substantial
growth areas
- Diversification: Nine current
products each with over $1 billion in annual sales, six near-term
product launch candidates, a combined total of >50 Phase 1 and
Phase 2 clinical programs and more “shots on goal”
- Significantly reduced concentration of
Bristol-Myers Squibb’s top 3 products in 2025 (from approximately
70% of sales on a standalone basis to approximately 45% of sales on
a combined basis)
- A strong late-stage pipeline:
This combined pipeline includes six expected near-term product
launches (including five from Celgene) representing more than $15
billion in non-risk adjusted revenue potential; of the six
near-term product launches, three (ozanimod, luspatercept and
fedratinib) are substantially de-risked with completed Phase 3
trials and completed or near-term submissions to the FDA for
approval
- Bristol-Myers Squibb’s projected total
sales from Celgene’s “Big 5” (luspatercept, fedratinib, liso-cel
(JCAR017), bb2121 and ozanimod) in 2025 are consistent with Street
forecasts
- Celgene’s “Big 5” are all
first-in-class or potentially best-in-class, substantially
de-risked assets with potential near-term approvals and expected to
be launched in the next 12-24 months; three out of the “Big 5” have
completed Phase 3/pivotal trials and two have been submitted for
regulatory approval
- Celgene contributes an enhanced and
differentiated platform in the CAR-T space, which has significant
long-term potential in oncology given the unprecedented efficacy
demonstrated by this modality
- The Celgene pipeline combined with
Bristol-Myers Squibb’s proven and leading commercialization
strength will drive tremendous value opportunities for our
shareholders
- A robust early-stage development
pipeline: The combined pipeline includes 20 compounds in
oncology IO / solid tumors, 11 in oncology/hematology, 9 in
cardiovascular/fibrosis and 11 in immunology &
inflammation
- A conservative valuation of
currently marketed products: Our valuation of Celgene’s
marketed products was underpinned by conservative Revlimid
forecasts. Recent positive US Patent and Trademark Office rulings
make us even more confident about Revlimid
- Specific, actionable
synergies: The Company has done extensive due diligence
to determine the $2.5 billion of sustainable, long-term synergies
with identifiable sources from both current Bristol-Myers Squibb
and Celgene operations. These synergies are durable given the
long-term sustainability of the combined companies, included the
strength of Celgene’s 5 late stage assets and broad early stage
pipeline
- Ideal timing: Trading
ratio at two-year lows and Celgene P/E near an all-time low when
deal was announced
- Continued financial
flexibility: Continued dividend increases and
accelerated share repurchase of $5 billion expected to be executed
subject to the closing of the transaction, market conditions and
Board approval
- A compelling value
proposition: Greater than 40% accretion to Bristol-Myers
Squibb standalone EPS in the first year and accretive each year
thereafter through 2025, approximately 10% accretive on a
discounted cash flow per share basis and IRR of 11% substantially
above cost of capital. The transaction also delivers long-term
strategic, operational and financial value – the combined company
will have sales and earnings increases every year through 2025, and
the robust pipeline provides us with many more “shots on goal” in
areas that are directly aligned with our therapeutic strengths
while continuing to provide financial flexibility to
opportunistically source innovation externally
Before embarking on this important transaction, the Board of
Directors thoroughly evaluated the acquisition against other
alternatives for value creation. The nature of patent cycles in our
industry means that companies like ours need to constantly
rejuvenate themselves to stay ahead. Bristol-Myers Squibb has done
this successfully over the past decade, and now we are focused on
executing a program to supplement and eventually replace Opdivo and
Eliquis – and sustaining our leadership for the future.
We don’t agree with recent suggestions to aggressively cut
R&D and pursue leveraged share repurchases. Given that we
operate in an industry that thrives on innovation, this approach is
inconsistent with the creation of both sustainable revenue growth
and long-term shareholder value. Similarly, in today’s competitive
and often overpriced environment for business development, we
determined that pursuing a ‘string-of-pearls’ approach to pipeline
development would not deliver value or pipeline opportunities that
are as compelling as acquiring Celgene.
To that end, Jim Cornelius, who initiated the ‘string-of
-pearls’ strategy when he was Chairman and CEO of Bristol-Myers
Squibb, agrees that the transaction with Celgene is the next
natural step in Bristol-Myers Squibb’s evolution:
“The Celgene transaction enables Bristol-Myers Squibb to buy the
“whole necklace” rather than stringing together individual assets.
This path forward is a smart move for the long term as it
eliminates paying potentially high individual premiums and
minimizes certain risks associated with several smaller
transactions. Bristol-Myers Squibb and Celgene are a strong
strategic and cultural fit and I have already voted 100% of my
Bristol-Myers Squibb shares in favor of the transaction. I have the
utmost confidence the Bristol-Myers Squibb management team can
deliver significant value through this deal and move the pipeline
forward through commercial execution.”
Bristol-Myers Squibb is a strong company today with our core
franchises and internal pipeline. The Celgene transaction is a
unique and compelling opportunity to diversify and further
strengthen the Company, both strategically and financially, now and
in the future.
For these reasons, the Bristol-Myers Squibb Board unanimously
and strongly believes that the Celgene acquisition is the right
transaction at the right time for Bristol-Myers Squibb shareholders
– and recommends that you vote your shares “FOR” the
proposed transaction with Celgene by signing, dating and returning
the Company’s WHITE proxy card at your earliest
convenience.
Thank you for your investment and continued support of the
Company.
Sincerely,
The Bristol-Myers Squibb Board of Directors
/s/ Giovanni Caforio
Giovanni Caforio, M.D.,
Chairman and CEO
/s/ Robert J. Bertolini,
Robert J. Bertolini
/s/ Alan J. Lacy,Alan J. Lacy
/s/ Gerald L. Storch,
Gerald L. Storch
/s/ Vicki L. Sato, Ph.D.
Vicki L. Sato, Ph.D.,
Lead Independent Director
/s/ Matthew W. Emmens,
Matthew W. Emmens
/s/ Dinesh C. Paliwal,Dinesh C.
Paliwal
/s/ Karen H. Vousden, Ph.D.,Karen H.
Vousden, Ph.D.
/s/ Peter J. Arduini,
Peter J. Arduini
/s/ Michael Grobstein,
Michael Grobstein
/s/ Theodore R. Samuels,Theodore R.
Samuels
The Bristol-Myers Squibb Board unanimously recommends that
Bristol-Myers Squibb shareholders vote their shares “FOR” the
approval of the issuance of shares of the Company’s common stock in
connection with our proposed acquisition of Celgene prior to
the Special Meeting, which will be held on April 12, 2019. All
Bristol-Myers Squibb shareholders of record as of the close of
business on March 1, 2019 will be entitled to vote their
shares.
Bristol-Myers Squibb urges shareholders to discard any blue
proxy cards and disregard any related solicitation materials sent
to you by Starboard Value LP, which is soliciting proxies from
Bristol-Myers Squibb shareholders against approving the merger.
Irrespective of whether shareholders previously submitted a blue
proxy card pertaining to the proposals contained in Bristol-Myers
Squibb’s definitive proxy statement, the Company urges shareholders
to cast their vote on the WHITE proxy card “FOR” the
proposal to approve the transaction.
If you have any questions, require
assistance with voting your proxy card,
or need additional copies of proxy
material, please contact MacKenzie Partners.
1407 Broadway, 27th Floor
New York, NY 10018
proxy@mackenziepartners.com
(212) 929-5500 or Toll-Free (800)
322-2885
About Bristol-Myers Squibb
Bristol-Myers Squibb is a global biopharmaceutical company whose
mission is to discover, develop and deliver innovative medicines
that help patients prevail over serious diseases. For more
information about Bristol-Myers Squibb, visit us
at BMS.com or follow us on LinkedIn, Twitter, YouTube and
Facebook.
Important Information For Investors And Stockholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. It does not constitute a prospectus or
prospectus equivalent document. No offering of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the U.S. Securities Act of 1933, as amended.
In connection with the proposed transaction between
Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) and Celgene
Corporation (“Celgene”), on February 1, 2019, Bristol-Myers Squibb
filed with the Securities and Exchange Commission (the “SEC”) a
registration statement on Form S-4, as amended on February 1, 2019
and February 20, 2019, containing a joint proxy statement of
Bristol-Myers Squibb and Celgene that also constitutes a prospectus
of Bristol-Myers Squibb. The registration statement was declared
effective by the SEC on February 22, 2019, and Bristol-Myers Squibb
and Celgene commenced mailing the definitive joint proxy
statement/prospectus to stockholders of Bristol-Myers Squibb and
Celgene on or about February 22, 2019. INVESTORS AND SECURITY
HOLDERS OF BRISTOL-MYERS SQUIBB AND CELGENE ARE URGED TO READ THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS
FILED OR THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain
free copies of the registration statement and the definitive joint
proxy statement/prospectus and other documents filed with the SEC
by Bristol-Myers Squibb or Celgene through the website maintained
by the SEC at http://www.sec.gov. Copies of the documents filed
with the SEC by Bristol-Myers Squibb are available free of charge
on Bristol-Myers Squibb’s internet website at http://www.bms.com
under the tab, “Investors” and under the heading “Financial
Reporting” and subheading “SEC Filings” or by contacting
Bristol-Myers Squibb’s Investor Relations Department through
https://www.bms.com/investors/investor-contacts.html. Copies of the
documents filed with the SEC by Celgene are available free of
charge on Celgene’s internet website at http://www.celgene.com
under the tab “Investors” and under the heading “Financial
Information” and subheading “SEC Filings” or by contacting
Celgene’s Investor Relations Department at ir@celgene.com.
Certain Information Regarding Participants
Bristol-Myers Squibb, Celgene, and their respective directors
and executive officers may be considered participants in the
solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers
of Bristol-Myers Squibb is set forth in its Annual Report on Form
10-K for the year ended December 31, 2018, which was filed with the
SEC on February 25, 2019, its proxy statement for its 2018 annual
meeting of stockholders, which was filed with the SEC on March 22,
2018, and its Current Report on Form 8-K, which was filed with the
SEC on August 28, 2018. Information about the directors and
executive officers of Celgene is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2018, which was filed
with the SEC on February 26, 2019, as amended on March 1, 2019.
Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, are contained in the
definitive joint proxy statement/prospectus of Bristol-Myers Squibb
and Celgene filed with the SEC and other relevant materials to be
filed with the SEC regarding the proposed transaction when they
become available. You may obtain these documents (when they become
available) free of charge through the website maintained by the SEC
at http://www.sec.gov and from Investor Relations at Bristol-Myers
Squibb or Celgene as described above.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. You can generally identify forward-looking statements by
the use of forward-looking terminology such as “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “explore,”
“evaluate,” “intend,” “may,” “might,” “plan,” “potential,”
“predict,” “project,” “seek,” “should,” or “will,” or the negative
thereof or other variations thereon or comparable terminology.
These forward-looking statements are only predictions and involve
known and unknown risks and uncertainties, many of which are beyond
Bristol-Myers Squibb’s and Celgene’s control.
Statements in this communication regarding Bristol-Myers Squibb,
Celgene and the combined company that are forward-looking,
including projections as to the anticipated benefits of the
proposed transaction, the impact of the proposed transaction on
Bristol-Myers Squibb’s and Celgene’s business and future financial
and operating results, the amount and timing of synergies from the
proposed transaction, the terms and scope of the expected financing
for the proposed transaction, the aggregate amount of indebtedness
of the combined company following the closing of the proposed
transaction, expectations regarding cash flow generation, accretion
to cash earnings per share, capital structure, debt repayment, and
credit ratings following the closing of the proposed transaction,
Bristol-Myers Squibb’s ability and intent to conduct a share
repurchase program and declare future dividend payments, the
combined company’s pipeline, intellectual property protection and
R&D spend, the timing and probability of a payment pursuant to
the contingent value right consideration, and the closing date for
the proposed transaction, are based on management’s estimates,
assumptions and projections, and are subject to significant
uncertainties and other factors, many of which are beyond
Bristol-Myers Squibb’s and Celgene’s control. These factors
include, among other things, effects of the continuing
implementation of governmental laws and regulations related to
Medicare, Medicaid, Medicaid managed care organizations and
entities under the Public Health Service 340B program,
pharmaceutical rebates and reimbursement, market factors,
competitive product development and approvals, pricing controls and
pressures (including changes in rules and practices of managed care
groups and institutional and governmental purchasers), economic
conditions such as interest rate and currency exchange rate
fluctuations, judicial decisions, claims and concerns that may
arise regarding the safety and efficacy of in-line products and
product candidates, changes to wholesaler inventory levels,
variability in data provided by third parties, changes in, and
interpretation of, governmental regulations and legislation
affecting domestic or foreign operations, including tax
obligations, changes to business or tax planning strategies,
difficulties and delays in product development, manufacturing or
sales including any potential future recalls, patent positions and
the ultimate outcome of any litigation matter. These factors also
include the combined company’s ability to execute successfully its
strategic plans, including its business development strategy, the
expiration of patents or data protection on certain products,
including assumptions about the combined company’s ability to
retain patent exclusivity of certain products, the impact and
result of governmental investigations, the combined company’s
ability to obtain necessary regulatory approvals or obtaining these
without delay, the risk that the combined company’s products prove
to be commercially successful or that contractual milestones will
be achieved. Similarly, there are uncertainties relating to a
number of other important factors, including: results of clinical
trials and preclinical studies, including subsequent analysis of
existing data and new data received from ongoing and future
studies; the content and timing of decisions made by the U.S. FDA
and other regulatory authorities, investigational review boards at
clinical trial sites and publication review bodies; the ability to
enroll patients in planned clinical trials; unplanned cash
requirements and expenditures; competitive factors; the ability to
obtain, maintain and enforce patent and other intellectual property
protection for any product candidates; the ability to maintain key
collaborations; and general economic and market conditions.
Additional information concerning these risks, uncertainties and
assumptions can be found in Bristol-Myers Squibb’s and Celgene’s
respective filings with the SEC, including the risk factors
discussed in Bristol-Myers Squibb’s and Celgene’s most recent
Annual Reports on Form 10-K, as updated by their Quarterly Reports
on Form 10-Q and future filings with the SEC.
It should also be noted that projected financial information for
the combined businesses of Bristol-Myers Squibb and Celgene is
based on management’s estimates, assumptions and projections and
has not been prepared in conformance with the applicable accounting
requirements of Regulation S-X relating to pro forma financial
information, and the required pro forma adjustments have not been
applied and are not reflected therein. None of this information
should be considered in isolation from, or as a substitute for, the
historical financial statements of Bristol-Myers Squibb or Celgene.
Important risk factors could cause actual future results and other
future events to differ materially from those currently estimated
by management, including, but not limited to, the risks that: a
condition to the closing of the proposed acquisition may not be
satisfied; a regulatory approval that may be required for the
proposed acquisition is delayed, is not obtained or is obtained
subject to conditions that are not anticipated; Bristol-Myers
Squibb is unable to achieve the synergies and value creation
contemplated by the proposed acquisition; Bristol-Myers Squibb is
unable to promptly and effectively integrate Celgene’s businesses;
management’s time and attention is diverted on transaction related
issues; disruption from the transaction makes it more difficult to
maintain business, contractual and operational relationships; the
credit ratings of the combined company decline following the
proposed acquisition; legal proceedings are instituted against
Bristol-Myers Squibb, Celgene or the combined company;
Bristol-Myers Squibb, Celgene or the combined company is unable to
retain key personnel; and the announcement or the consummation of
the proposed acquisition has a negative effect on the market price
of the capital stock of Bristol-Myers Squibb and Celgene or on
Bristol-Myers Squibb’s and Celgene’s operating results.
No assurances can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any
of them do occur, what impact they will have on the results of
operations, financial condition or cash flows of Bristol-Myers
Squibb or Celgene. Should any risks and uncertainties develop into
actual events, these developments could have a material adverse
effect on the proposed transaction and/or Bristol-Myers Squibb or
Celgene, Bristol-Myers Squibb’s ability to successfully complete
the proposed transaction and/or realize the expected benefits from
the proposed transaction.
You are cautioned not to rely on Bristol-Myers Squibb’s and
Celgene’s forward-looking statements. These forward-looking
statements are and will be based upon management’s then-current
views and assumptions regarding future events and operating
performance, and are applicable only as of the dates of such
statements. You also should understand that it is not possible to
predict or identify all such factors and that this list should not
be considered a complete statement of all potential risks and
uncertainties. Investors also should realize that if underlying
assumptions prove inaccurate or if unknown risks or uncertainties
materialize, actual results could vary materially from
Bristol-Myers Squibb’s or Celgene’s projections. Except as
otherwise required by law, neither Bristol-Myers Squibb nor Celgene
is under any obligation, and each expressly disclaim any
obligation, to update, alter, or otherwise revise any
forward-looking statements included in this communication or
elsewhere, whether written or oral, that may be made from time to
time relating to any of the matters discussed in this
communication, whether as a result of new information, future
events or otherwise, as of any future date.
This communication contains non-GAAP financial measures that are
adjusted to exclude certain costs, expenses, gains and losses and
other specified items that are evaluated on an individual basis.
Non-GAAP information is intended to portray the results of our
baseline performance, supplement or enhance management, analysts
and investors overall understanding of our underlying financial
performance and facilitate comparisons among current, past and
future periods. This information is not intended to be considered
in isolation or as a substitute for financial measures prepared in
accordance with GAAP and may not be the same as or comparable to
similarly titled measures presented by other companies due to
possible differences in method and in the items being adjusted.
1 Shareholders can access these documents at
www.bestofbiopharma.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190325005269/en/
Media:Carrie Fernandez609-252-5222Carrie.Fernandez@bms.comorAndy
Brimmer / Dan KatcherJoele Frank, Wilkinson Brimmer
Katcher212-355-4449Investors:Tim
Power609-252-7509timothy.power@bms.comorDan BurchMacKenzie
Partners, Inc.212-929-5748dburch@mackenziepartners.com
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