Bristol-Myers Shareholders Approve $74 Billion Deal For Celgene -- Update
April 12 2019 - 1:04PM
Dow Jones News
By Jared S. Hopkins
Bristol-Myers Squibb shareholders on Friday approved the
company's $74 billion acquisition of rival Celgene Corp., looking
past an unsuccessful activist campaign to break up the deal.
The deal, first announced Jan. 3, passed with more than 75% of
shareholders voting in favor of it. About 24% of shareholders voted
against the deal, with less than 1% abstained. A majority of the
shares voted were needed for approval. The deal is expected to be
completed in the third quarter this year.
The combined company will have nearly $38 billion in annual
sales and command a leading position in the $123 billion world-wide
market for cancer drugs.
New York-based Bristol pioneered the development of cancer drugs
known as immunotherapies, which unleash the body's immune system on
tumors. Summit, N.J.-based Celgene leads in the sale of treatments
for multiple myeloma.
On Friday morning, shares of Bristol-Myers were down slightly at
$45.46, while Celgene shares were down slightly at $94.09.
Serious challenges for the combined company lie ahead. Bristol
faces heavy competition from Merck & Co. for immunotherapy
sales, while Celgene's top-selling product, multiple myeloma
treatment Revlimid, is expected to lose U.S. patent protection in
the next several years.
Bristol-Myers Chief Executive Giovani Caforio said after the
vote that he would continue to work with all shareholders. He
declined to comment on how the 24% no votes compared with other
deals because each deal is unique. But he said he was pleased to
have support of more than three-quarters of shareholders.
"I believe that is an important endorsement," he said. "At the
same time, I do not minimize the fact that some shareholders had
expressed concerns about the deal."
Mr. Caforio said he is encouraged that since the deal's
announcement three treatments in Celgene's pipeline have been
submitted for approval with the Food and Drug Administration. He
said he also is confident because of two legal proceedings related
to Celgene's top-selling drug, Revlimid. Criticism of the deal was
tied in part to the approaching loss of exclusivity for the drug,
which generates about two-thirds of Celgene's revenue.
Caforio said the company has put in place measures to hold
management accountable for the deal. When asked whether
Bristol-Myers might remain a target of activist investors, he
declined to "speculate on hypothetical futures."
Given the risks, Bristol-Myers shareholders were cool on the
deal when it was announced in January, driving the company's stock
down 14%.
Then in February, hedge fund Starboard Value LP voiced
opposition to the combination and moved to install its own set of
directors.
Boston-based investment firm Wellington Management Co. also
publicly opposed the deal. A handful of other shareholders also
expressed displeasure, including the fifth-largest shareholder,
Dodge & Cox, The Wall Street Journal reported.
Wellington has a stake of 7.2% in Bristol-Myers, according to
FactSet, but doesn't control the votes on most of those shares. And
Starboard dropped its fight after a thumbs-up from Institutional
Shareholders Services Inc. and Glass Lewis & Co.
(END) Dow Jones Newswires
April 12, 2019 12:49 ET (16:49 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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