Bristol's Celgene Deal Clears A Hurdle -- WSJ

Date : 04/15/2019 @ 8:02AM
Source : Dow Jones News
Stock : Bristol-Myers Squibb Company (BMY)
Quote : 45.32  0.08 (0.18%) @ 12:58AM

Bristol's Celgene Deal Clears A Hurdle -- WSJ

Bristol Myers Sqibb (NYSE:BMY)
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By Jared S. Hopkins 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 15, 2019).

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.

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 15, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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