The Bristol-Myers Squibb Co. board continues to ask its shareholders to vote in favor of the company's $95 billion acquisition of Celgene Corp. ahead of an April 12 meeting.
New York-based Bristol-Myers said the transaction, which has seen opposition from certain shareholders, will allow it to buy the "whole necklace" rather than stringing together individual assets. The deal takes into account long-term growth for the company and will eliminate paying potentially high individual premiums and minimize risks related to smaller transactions.
In a letter, Bristol-Myers' board said the combined company will be propelled to the top spot in the oncology and cardiovascular segments. The transaction will bring together nine blockbuster products with more than $1 billion in annual sales each. The companies also said they have a strong product pipeline of early and late-stage assets.
Bristol-Myers said it had undertaken conservative forecasts for Celgene's cancer drug Revlimid but was confident after the U.S. Patent and Trademark Office's favorable decision related to the medicine.
Wellington Management Group LLP, Bristol-Myers' largest investor, and Starboard Value LP, which holds a much smaller share at 0.06%, have opposed the proposed deal. Both investors cited the patent cliff threatening Celgene's leading cancer drug Revlimid. The investors believe the transaction will eat into Bristol-Myers' revenue in the future.
Celgene had several pipeline drugs stumble in the development process. Earlier in March, Celgene's cancer drug Abraxane failed a late-stage study to treat pancreatic cancer while multiple sclerosis therapy ozanimod saw a rejection by the U.S. Food and Drug Administration in February 2018. Its experimental Crohn's disease drug GED-0301 failed in a late-stage study in 2017. The company had spent about $710 million to acquire the drug.
Earlier in January, two members of Congress had also raised concerns about the deal's impact on competition.
Bristol-Myers, however, noted in its letter that the deal will generate cost savings of about $2.5 billion and that it also plans to undertake a $5 billion share buyback program, subject to the closing of the transaction, market conditions and board approval.
Bristol-Myers CEO Giovanni Caforio has already dismissed speculation that the pharmaceutical giant could become an acquisition target.