- Amgen will buy Otezla, Celgene's flagship psoriasis drug, for $13.4 billion - or about $11.2 billion after future cash tax benefits.
- The deal sweetens Celgene's case to antitrust officials as it seeks approval for a $74 billion merger with Bristol-Myers Squibb, which was first announced in January 2019.
- Shares of Celgene and Bristol-Myers rose as much as 5.7% and 3.2%, respectively, in early Monday trading. Amgen fell as much as 2.1%.
- Watch Amgen trade live here.
Amgen will buy Otezla, a promising psoriasis drug made by Celgene, for $13.4 billion. The deal is intended to help Celgene make a better antitrust case for its proposed $74 billion merger with Bristol-Myers Squibb.
The Monday announcement gives Amgen a flagship new treatment for a condition that affects about 8 million Americans, according to the National Psoriasis Foundation. It also benefits Celgene and Bristol-Myers as the companies sell assets to appeal to antitrust regulators.
Bristol-Myers already has a competing psoriasis drug in development, and announced its plan to sell Celgene's Otezla drug in June as part of its divestiture process. The psoriasis treatment had sales of $1.61 billion in 2018 and expected revenue of $2.71 bullion in 2023, Bloomberg reported.
Amgen noted the acquisition will be about $11.2 billion after future cash tax benefits are accounted for.
Business Insider's Emma Court previously wrote about Otezla as a possible divestiture candidate.
The Otezla sale requires final antitrust approval of the merger. Bristol-Myers previously said it expects its deal with Celgene to close by the end of 2019 or near the beginning of 2020.
The merger would serve as one of the largest pharma deals in the last decade. Though divestiture sales typically bring lower prices as companies look to quickly win merger approval, Monday's purchase rang in above analyst estimates. The acquisition would likely cost between $8 billion and $10 billion, analysts told Bloomberg through July and August.
Shares of Bristol-Myers and Celgene were up as much as 5.7% and 3.2%, respectively, in early Monday trading. Amgen traded as much as 2.1% lower on the news.
Amgen closed at $199.08 per share Friday, up about 2.3% year-to-date. The company has 11 "buy" ratings, 16 "hold" ratings, and no "sell" ratings from analysts, with a consensus price target of $212, according to Bloomberg data.
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