The $74-Billion Marriage of Bristol-Myers Squibb and Celgene

Bristol-Myers Squibb completed its $74-billion acquisition of Celgene last month to form a newly combined company with eight products of over $1 billion in annual sales and near-term revenue potential of over $15 billion in new launches. What was the strategic rationale behind the deal, and what are the product and manufacturing positions of the newly formed company? DCAT Value Chain Insights takes an inside look.

Inside the newly combined Bristol-Myers Squibb and Celgene

Announced in January 2019 and completed last month (November 2019), the $74-billion acquisition of Celgene by Bristol-Myers Squibb (BMS) creates a combined company with eight products with more than $1 billion in annual sales in core disease areas of oncology, immunology and inflammation, and cardiovascular disease and near-term launch opportunities representing more than $15 billion in revenue potential, according to the companies. The companies expect to achieve $2.5 billion in cost synergies. Minus from the companies’ combined drug portfolios is Celgene’s blockbuster drug, Otezla (apremilast), a drug for treating moderate-to-severe plaque psoriasis and psoriatic arthritis. The companies divested the drug to Amgen for $13.4 billion last month (November 2019) as part of a condition for US Federal Trade Commission approval of the merger.

Key drugs from BMS are its immuno-oncology drug, Opdivo (nivolumab) with 2018 global sales of $6.735 billion, and the anticoagulant, Eliquis (apixaban), which had 2018 global sales of $6.438 billion, the two top-selling drugs from BMS in 2018. On the Celgene side, a key drug is Celgene’s multiple myeloma drug, Revlimid (lenalidomide), with 2018 global sales of $9.685 billion. Overall, in 2018, Bristol-Myers Squibb, posted 2018 revenues of $22.561 billion and Celgene 2018 revenues of $15.281 billion.

The combined company would also have near-term launch opportunities representing more than $15 billion in revenue potential according to the companies at the time of the merger announcement. The combined company will have six expected near-term product launches: two in immunology and inflammation, TYK2 and ozanimod, and four in hematology, luspatercept, liso-cel (JCAR017), bb2121, and fedratinib. The combined company’s early-stage pipeline includes 50 high-potential assets, according to the companies. It also would have combined discovery capabilities in a broad range of modalities in small-molecule design, biologics/synthetic biologics, protein homeostasis, antibody engineering, and cell therapy.

Key products and pipeline assets of combined company

For commercial products, the key product franchise for the combined company is oncology. Key products of the combined company are BMS’s immuno-oncology drug, Opdivo (nivolumab) with 2018 global sales of $6.735 billion, BMS’s checkpoint inhibitor, Yervoy (ipilimumab) with 2018 sales of $1.330 billion, BMS’s Sprycel (dasatinib) for treating certain types of leukemia with 2018 global sales of $2.0 billion, Celgene’s multiple myeloma drug, Revlimid (lenalidomide), with 2018 sales of $9.685 billion and Celgene’s checkpoint inhibitor, Pomalyast (pomalidomide), with 2018 sales of $2.040 billion. Other key product franchises are inflammatory and immunology with Bristol-Myers Squibb’s Orcenia (abatacept), a drug used to treat autoimmune diseases, including rheumatoid arthritis, with 2018 sales of $2.710 billion, and cardiovascular led by Bristol-Myers Squibb’s anticoagulant, Eliquis (apixaban), with 2018 sales of $6.438 billion.

On a pipeline basis (as of the merger announcement in January 2019), the combined company has 10 late-stage (Phase III assets) with six products expected to be launched in the next 24 months and more than 20 products in immuno-oncology for lifecycle management. For early-stage (Phase I and Phase II), key therapeutic areas are: oncology for solid tumors and immuno-oncology with 21 products: 10 oncology hematology products; 10 drug candidates in immunology and inflammation; and nine products in cardiovascular and fibrosis.

The acquisition also positions Bristol-Myers Squibb in cell therapies. In 2018, Celgene acquired Juno Therapeutics for approximately $9 billion, a company that is developing chimeric antigen receptor T cell (CAR T) therapies and T cell receptor (TCR) therapeutics for multiple targets and cancer indications. A key addition to Celgene’s lymphoma program wasJuno’s JCAR017 (lisocabtagene maraleucel; liso-cel), a CD19-directed CAR T therapy for treating relapsed and/or refractory diffuse large B-cell lymphoma. At the time of the announced Juno acquisition in January 2018, Celgene said it expects regulatory approval for JCAR017 in the US in 2019 with potential global peak sales of approximately $3 billion. Another key asset from Juno is CARH125, which Celgene says will enhance its campaign against BCMA (B-cell maturation antigen), a key target in multiple myeloma. Celgene also gained additional cellular therapy assets in proof-of-concept trials for hematologic malignancies and solid tumors.

The acquisition of Juno provided Celgene a scientific platform that complements Celgene’s position in hematology and oncology as well as scalable manufacturing capabilities. In collaboration with Juno’s team in Seattle, Washington, Celgene said with the acquisition of Juno, it planned to expand its existing center of excellence for immuno-oncology translational medicine by using Juno’s research and development facility in Seattle as well as Juno’s manufacturing facility in Bothell, Washington.

Manufacturing of the combined company

In terms of manufacturing, key capabilities of the combined company include large-scale and development capacity for biologics, led by Bristol-Myers Squibb’s biomanufacturing facility in Devens, Massachusetts and plans for another large-scale biomanufacturing facility in Ireland. Bristol-Myers Squibb plans to open a new EUR 900 million ($1.02 billion) large-scale biologics manufacturing facility in Cruiserath, County Dublin, near Blanchardstown that will produce multiple therapies for the company’s growing immuno-oncology portfolio. The manufacturing facility was estimated to be operational in 2019.

The new facility follows a recent large-scale biomanufacturing investment by the company at its biomanufacturing facility in Devens, Massachusetts. In 2016, Bristol-Myers Squibb completed a major expansion at its Devens facility. The $280-million project added two new buildings to the 89-acre Devens campus: a biologics development building for designing processes for the early production of investigational medicines and a clinical manufacturing building for investigational medicines to support clinical trials. Both are new capabilities for Devens, a site that had previously focused solely on large-scale, bulk biologics manufacturing. The two new buildings also added approximately 200,000 square feet to a site now previously comprised of eight major buildings in a 600,000-square-foot complex. When combined with the company’s initial $750-million investment to build the facility, the expansion project brings the company’s total investment at the Devens site to more than $1 billion.

Celgene also brings specialized manufacturing capabilities for cell therapies. In February 2018, Celgene completed the first phase of a new immunotherapy manufacturing center for CAR-T therapies at its Summit West campus in New Jersey. Celgene expects to expand investigational programs and launch bb2121, its CAR-T therapy being developed for certain multiple myeloma patients in conjunction with its partner, bluebird bio, a Cambridge, Massachusetts-based clinical-stage gene therapy company. With CAR-T technology, immune cells are removed from a patient, genetically modified and multiplied, and placed back into a patient to create an individualized therapy. Celgene had been manufacturing bb2121 in its facility in Warren, New Jersey for clinical trials.

Celgene is involved in cellular therapy development through its Celgene Cellular Therapeutics business that focuses on placenta-derived and other stem-cell therapies in multiple diseases and cell therapies through its acquisition of Juno Therapeutics.

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