Shareholders of Celgene will receive one share of BSM stock, plus $50 in cash for each share they own.
The combined company will have nine products with more than $1 billion each in annual sales and significant potential for growth in the core disease areas of oncology, immunology and inflammation and cardiovascular disease.
Shareholders of Bristol-Myers would own about 69 percent of the company, with Celgene shareholders owning about 31 percent.
Celgene's shares rocketed in premarket trading Thursday morning on the deal news, soaring around 32 percent to $88.80.
In a press release jointly issued by the companies, Giovanni Caforio, M.D., Chairman and Chief Executive Officer of Bristol- Myers Squibb, said. Morgan Stanley lowered their price objective on shares of Bristol-Myers Squibb from $63.00 to $59.00 and set a "hold" rating for the company in a research note on Tuesday, November 6th.
Bristol expects to achieve the $2.5 billion in cost savings by 2022 and said the deal will add more than 40 percent to its earnings in the first year after the deal closes, expected in the third quarter of 2019.
Some analysts, including Baird Equity's Brian Skorney, said it raised the possibility of a new era of big drug deals, much like in 2009, when Pfizer Inc, Merck, and Roche Holding AG all pulled off transformational acquisitions.
The cash-and-stock portion of the deal totals $102.43, based on Wednesday's closing price of $52.43 for Bristol shares.
The company has said in securities filings that it expects competitors could market generic versions of its Revlimid cancer drug ahead of patent expirations, which Celgene has said will remain in force "at least through 2022".
Revlimid is expected to bring in almost $10 billion in revenue for 2018 and is the backbone of new combination multiple myeloma treatments. Two investment analysts have rated the stock with a sell rating, thirteen have given a hold rating and seven have given a buy rating to the company's stock.
Now let's take a look at what's on the horizon: for the financial results of the current quarter, So far - there have been 6 different Wall Street analysts that have provided investors with their professional projections for Bristol-Myers Squibb Company For net profit, these analysts are collectively forecasting an average estimate of $0.84 per share, versus the $0.68 per share reported in the year-ago quarter.
According to Reuters' report, Bristol Myers approached Calgene in September 2018 to initiate talks of a purchase. The Boards of Directors of both companies have approved the combination.
"Both of them were coming into this year kind of limping".
But cash flow from Revlimid buys Bristol-Myers time to pay down debt and position for another transaction, Boris said.
But a note from Cowen said the effect of the deal was "mixed".
Those drugs include the three treatments whose approval the CVR payment is based on - Celgene's high-profile multiple sclerosis drug ozanimod, lymphoma treatment liso-cel by December 31, 2020 and a CAR-T therapy for multiple myeloma known as bb2121 from a partnership with bluebird bio by March 31, 2021.