Bristol-Myers Squibb Plans Sale of Celgene’s Otezla

Bristol-Myers Squibb (BMY) said on Monday that Celgene (CELG) will sell its psoriasis treatment Otezla, one of the biopharmaceutical’s top selling drugs that’s expected to bring in almost $2 billion in revenue this year, in a bid to win approval for the companies’ merger plans.

Bristol-Myers Squibb is planning the divestiture “to allow the transaction to close on a timely basis in light of concerns expressed by the (Federal Trade Commission),” it said in a statement. The company needs to enter into a consent decree with the FTC, and the sale is still subject to review by the regulator.

“Bristol-Myers Squibb is committed to working with regulatory authorities around the world on the proposed combination with Celgene,” it said in the statement. “The company is focused on realizing the promise of the transaction, and is continuing to work to complete the transaction on a timely basis.”

Shares in Celgene were down 5.2% and Bristol-Myers Squibb shed 7.2%.

In April, Summit, NJ-based Celgene said Otezla’s sales rose 10% year-on-year to $389 million, driven by demand in the US and expansion in key markets outside the US. The company projected net product sales of about $1.9 billion for 2019, which would be an increase of about 18% annually.

The closing date for the merger, announced in January as a cash and stock deal valued at $74 billion, was initially expected to be in the third quarter of this year. On Monday, Bristol-Myers Squibb said they currently expect the closing date to be at the end of 2019 or in the beginning of 2020.

“The proceeds of the Otezla sale will allow Bristol-Myers Squibb to accelerate its post-closing deleveraging plans,” the company said. Morgan Stanley will be the financial advisor for the divestiture.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.

Leave a Reply

Your email address will not be published. Required fields are marked *

*