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Amgen to buy Celgene’s Otezla in $13.4bn deal

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Bristol-Myers Squibb has announced that Celgene will sell the global rights to Otezla, a medicine for patients with psoriasis and psoriatic arthritis, to rival Amgen for $13.4bn, in the latest “megadeal” in the pharmaceutical sector this year.

The sale of Otezla is part of an effort by Bristol-Myers to divest assets to win regulatory approval for its previously agreed $90bn takeover of rival biotech giant Celgene, the company said on Monday.

“This agreement represents an important step toward completing our pending merger with Celgene,” said Giovanni Caforio, chairman and chief executive of Bristol-Myers.

Pharmaceutical and healthcare companies have been on a deal frenzy this year, partly driven by the desire to sell non-core assets or buy innovative medicines as their own drugs are close to losing patent protection. Major pharmaceutical groups are focusing on becoming one of the top three players in whatever category they operate.

So far this year, more than $700bn worth of transactions have been agreed in the pharmaceutical and healthcare sector, according to Refinitiv, including AbbVie’s decision to buy the maker of Botox, Allergan for $63bn, Pfizer’s sale of it’s off-patent drug business to Mylan for $9.5bn, and Roche’s $4.8bn takeover of gene therapy company Spark Therapeutics. Bristol-Myers acquisition of Celgene is the largest in the largest pharma deal of the year and was announced in January.

Bristol-Myers also announced that it plans to buy back $7bn worth of shares, up from the previously planned $5bn share repurchase. The move follows strong business performance and encouraging clinical developments across the pipeline of its portfolios.

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Under the terms of the agreement, Amgen will acquire Otezla and its related intellectual property, plus any other assets and liabilities connected to the company. The deal will also impact Celgene employees who produce Otezla as they will transfer to Amgen.

The deal, which is expected to close by the end of 2019, will help Bristol-Myers deleverage and maintain its investment grade rating.

Via Financial Times

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