The $74 billion merger of Bristol-Myers Squibb and Celgene has been delayed as FTC pushback spurred Celgene to divest a major psoriasis drug. The news rattled investors’ confidence and sent Bristol-Myers stock down more than 7 percent Monday, while Celgene shares fell 5 percent.
In response to FTC concerns, Celgene said that it would sell off Otezla, a psoriasis drug that posted revenues of $1.61 billion last year. Bristol-Myers is also developing a psoriasis drug that is currently in mid-stage trials. As part of the divestiture, Bristol-Myers Squibb must enter into a consent decree with the FTC.
The deal was originally set to go through in September and is now expected to close by the end of 2019 or the beginning of next year, Bristol-Myers said. The companies have also formally applied for the merger in Europe.
The deal, first announced in January, has implications for the fate of Seattle-based biotech Juno Therapeutics, which was bought by Celgene in January 2018 for $9 billion. Bristol-Myers has said that Seattle will be part of the company’s global footprint going forward.
“Bristol-Myers Squibb reaffirms the significant value creation opportunity of the acquisition of Celgene. Together with $2.5 billion of cost synergies, a compelling pipeline and a strong portfolio of marketed products, the Company continues to expect growth in sales and earnings through 2025,” the company said in a statement.