Bristol-Myers Squibb Co announced it would buy Celgene for about $74 billion, combining two of the world’s largest cancer drug businesses in the first megadeal of the new year.
Both companies are facing challenges, but have said that the merger will create $2.5 billion in cost savings and significantly raise earnings. (They even created an infographic to illustrate this.) BMS’s important cancer immunotherapy, Opdivo, has been losing ground to Merck’s rival drug, Keytruda, and Celgene will lose U.S. exclusivity on its flagship multiple myeloma drug, Revlimid, in 2022.
Including debt, the deal is worth $95 billion. Bristol expects to achieve the $2.5 billion in cost savings by 2022, with 55 percent coming from cuts in sales, general and administrative expenses, 35 percent through reduction in research & development spending and 10 percent from manufacturing.
Read the press release