Sector News

Bristol-Myers seen as takeover bait

February 15, 2017
Life sciences

Based on industry sources, Bristol-Myers Squibb is in play and at least three potential suitors could be eyeing the prize.

Bristol-Myers Squibb stock has been hammered of late, in part on a major setback for Opdivo plus Yervoy in first-line lung cancer – now shareholders are clamoring for the company to put the “for sale” sign up. Roche Holdings, Novartis and Pfizer are thought to be kicking the tires and Gilead Sciences is also seen as a potential suitor.

While many Bristol-Myers shareholders would likely welcome a sale, it is unclear if Bristol-Myers Squibb board is ready to entertain offers. A deal, if pursued, could be valued at as much as $120 billion, or $72 per share, sources said.

The deal speculation also follows recent talks between the US pharmaceutical lobbyists and President Trump as the US government seeks possible avenues designed to reduce the costs of drugs. As Trump comes to realize he cannot rule strictly by issuing executive orders he may need to concede some testing rights for the big drug companies, such a reducing the time required to bring new drugs to market. Recall Newsweek’s comments back on February 3: “Trump wooed the attending CEOs – representing six drug makers plus the Pharmaceutical Research and Manufacturers of America, the industry’s chief lobbying organization – with promises of speeding up the process of bringing new drugs to market and removing regulations that deter companies from manufacturing drugs stateside. ‘You can’t get approval for a new plant, you can’t get approval for a new drug,’ he said. ‘So we’re going to take care of that.'”

Speculators think moves by Trump could force buyers to take a harder, longer look at Bristol-Myers given potential benefits in a trade-off with the Trump administration.

Bristol-Myers representatives have not responded to multiple requests for comment. Novartis spokesperson Eric Althoff said he would not speak to the interest in Bristol-Myers, although Althoff did address the meeting with Trump telling, saying his team “…left the meeting optimistic that we can work with the new Trump administration to ensure the U.S. continues to foster innovation and allows our industry to deliver breakthrough medicines that extend and enhance people’s lives, reduce healthcare costs and improve public health.”

Source: StreetInsider

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