SUMMIT, NJ — Bristol-Myers Squibb will acquire Summit-based Celgene Corp. in a cash and stock purchase for $74 billion, the two firms announced Jan. 3, creating a company with a combined $34 billion in annual pharmaceutical sales.
Neither company addressed specifically how the merger would affect employees, although New York-based Bristol-Myers Squibb said in a release announcing the transaction that it expects to see $2.5 billion in “run-rate cost synergies” by 2022.
“The combined company will continue to have a strong presence throughout New Jersey,” Bristol-Myers Squibb said in its release.
About 3,000 of Celgene’s more than 7,500 employees are in New Jersey while about 6,300 of Bristol-Myers Squibb’s approximately 24,000 workers are in New Jersey, mostly at its research and development sites in Lawrence, Hopewell Township and New Brunswick.
“The transaction will create a leading focused specialty biopharma company well positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease through high-value innovative medicines and leading scientific capabilities,” both companies said in their releases.
Under the terms of the agreement, Celgene shareholders will receive one Bristol-Myers Squibb share and $50 in cash
for each share of Celgene.
Based on the closing price of $52.43 per share of Bristol-Myers stock on Jan. 2, the value to each Celgene stock holder was valued at $102.43 per share.
Bristol-Myers stock dropped to $45.11 by the close of business on Jan. 3, while Celgene’s stock jumped $13.79, or 21 percent, to $80.43 by the end of the trading day after climbing above $86 shortly after the opening.
The acquisition is still subject to the approval of the shareholders of both companies, which the two said would be completed in the third quarter of 2019. When executed, Bristol-Myers Squibb stockholders will own approximately 69 percent of the company while Celgene shareholders will own the other 31 percent.
The merged company will be headed by Bristol CEO and Chairman Dr. Giovanni Caforio.
Celgene, which had been headed by Bob Hugin, who resigned his post to run unsuccessfully against U.S. Sen. Bob Menendez last year, is known for drugs such as the anti-inflammatory Otezla and the cancer drug Revlimid.
Bristol, which previously sold the over-the-counter brands Bufferin, Excedrin and Ban deodorant, manufactures the heart drug Eliquis.
“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” Caforio said in Bristol’s press release.
“For more than 30 years, Celgene’s commitment to leading innovation has allowed us to deliver life changing treatments to patients in areas of high unmet need,” Celgene CEO and Chairman Mark Alles said in his company’s release. “Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company.”