Bristol-Myers Squibb is taking on a debt load to cover its $74 billion Celgene buyout, and it issued $19 billion in bonds Tuesday to help pay the bill.
Bristol-Myers issued bonds in nine tranches that come due starting next year and stretch all the way out into 2049. In all, Bristol wants to take on $32 billion in new debt itself, plus $20 billion in Celgene debt, to fund the deal, the drugmaker said in a presentation (PDF) outlining the proposed merger.
But BMS doesn’t plan to carry that burden for long. Company executives have said they’re planning to quickly put their money to work paying down that load. The combined company would have $45 billion in free cash flow in the first three years after closing, BMS has said.
“Our priorities for capital deployment moving forward include rapidly paying down debt over the next few years, improving our credit metrics, and we expect to continue to increase our dividend,” Bristol CEO Giovanni Caforio said on the company’s first-quarter conference call.
Bristol announced the massive Celgene buy back in early January. In touting the deal, executives said the combined company would be the top player in oncology and cardiovascular diseases, plus a top 5 company in immunology and inflammation. It’d have nine products with more than $1 billion in annual sales plus six near-term launches.
The deal faced activist investor pushback in the months that followed, but investors signed off on the acquisition in April.
It’s far from the first time a pharma company has issued billions of dollars worth of bonds to finance an acquisition. Roche in 2009 issued $16 billion in bonds to fund its Genentech buy. More recently, Teva Pharmaceutical issued $20 billion worth of bonds to buy Allergan’s generics unit.
Bristol’s bond deal is the largest in any industry so far this year and 10th-largest of all time, Bloomberg reports.
By Eric Sagonowsky
Source: Fierce Pharma
Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.
Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.
On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.
