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What to Expect from BMY’s Portfolio after Celgene Acquisition

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Combined company’s portfolio

In its investor presentation, Bristol-Myers Squibb (BMY) estimated the value of currently marketed products of the combined company after completion of the acquisition of Celgene (CELG) to be $55 billion. The company claims this to be a conservative estimate and projects the value to be close to $70 billion based on Wall Street estimates.

After completion of the acquisition of Celgene, Bristol-Myers Squibb expects the combined company to be the top-ranking oncology player with prominent drugs such as Opdivo, Yervoy, Sprycel, Revlimid, Pomalyst, and Abraxane, in its portfolio. The combined company is expected to be a top-ranking cardiovascular player due to Eliquis and one of the top five players in the I&I (immunology and inflammation) space, with Orencia and Otezla in its portfolio.

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Synergies

In its investor presentation, Bristol-Myers Squibb has forecasted more than $20 billion worth of synergies from the acquisition of Celgene. The company expects to realize run-rate cost synergies worth $2.5 billion in the third year after deal completion, which will represent around 13% of the combined company’s operating expenses. The company expects to derive 55% of the cost synergies from SG&A (selling, general, and administrative) expenses, 35% from R&D (research and development) expenses, and the remaining 10% from manufacturing expenses. To realize these synergies, Bristol-Myers Squibb has planned to introduce commercial efficiencies in oncology and I&I franchises of both the companies, reduce overlap of resources in the R&D pipeline, and leverage its biologic capabilities to further advance the development of Celgene’s investigational biologic products.

Pipeline valuation

In its investor presentation, Bristol-Myers Squibb highlighted the value of Celgene’s research pipeline, which includes five late-stage assets called the “Big 5,” more than 20 Phase 1/2 assets, and cell therapy and protein homeostasis platforms, to be close to $45 billion. The combined company will have more than 40 Phase 1/2 assets, which could potentially be launched by fiscal 2023.

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