Bristol-Myers Squibb Issues Statement in Response to Starboard’s Letter

Bristol-Myers Squibb Company today issued the following statement in response to a letter from Starboard Value:

Bristol-Myers Squibb welcomes the opinions of all of its stockholders and will review Starboard’s letter and respond in due course.

The Bristol-Myers Squibb Board and management team are confident that our combination with Celgene Corporation will create a premier biopharma company and deliver substantial benefits to our stockholders. This combination is consistent with our strategy and is the natural next step in the evolution of Bristol-Myers Squibb. As a combined entity, we will enhance our leadership positions across our portfolio, including in oncology, immunology and inflammation and cardiovascular. We will also benefit from an expanded early- and late-stage pipeline highlighted by six expected near-term product launches, including five from Celgene, representing more than $15 billion in total revenue potential. Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.

The benefits of the combination are significant:

• The Celgene transaction is the natural next step in Bristol-Myers Squibb’s proven strategy that has consistently delivered results for over a decade. Through a disciplined approach to driving innovation, focusing on high-value opportunities and sourcing innovation externally to complement its internal portfolio and pipeline, Bristol-Myers Squibb has generated consistently strong growth and increased its dividend for 10 consecutive years. The combination with Celgene will create a leading biopharma with increased scale, while maintaining the same agility and a focus on delivering for patients in core disease areas of high-unmet medical need.
• The pipeline of the combined company provides significant near-, medium- and long-term opportunities for value creation. Bristol-Myers Squibb is acquiring Celgene’s robust and complementary pipeline at an attractive price. In addition to six expected near-term product launches, including five from Celgene’s strong pipeline, representing more than $15 billion in total revenue potential, the combination will greatly increase Bristol-Myers Squibb’s Phase I and II assets, which will provide the next set of registrational opportunities in core therapeutic areas. With an expanded set of scientific platforms and research capabilities, Bristol-Myers Squibb will be well positioned to discover and develop highly innovative medicines and accelerate these new options to patients through one of the highest-performing commercial organizations in the industry.
• Bristol-Myers Squibb is well positioned for 2025 and beyond with continued leadership across Oncology and a diversified portfolio of assets. The combined company will have a broad, balanced and earlier life-cycle marketed portfolio with a significantly higher number of opportunities across multiple diseases to drive the growth of Bristol-Myers Squibb in the second half of the decade. These opportunities will support financial strength for continued investment and innovation.
• The Celgene transaction is expected to generate meaningful financial benefits for all stockholders. With more than $45 billion of expected free cash flow generation over the first three full years post-closing, the combination will enable rapid debt reduction to de-lever the balance sheet and strengthen Bristol-Myers Squibb’s credit profile. Bristol-Myers Squibb expects to realize run-rate cost synergies of approximately $2.5 billion by 2022 from the combination, and the combined company is expected to grow revenue and EPS every year through 2025.

The Bristol-Myers Squibb Board is composed of 11 highly qualified directors, 10 of whom are independent. The Company’s directors bring extensive leadership experience across a range of areas that are important to Bristol-Myers Squibb’s continued success, including health care, medical technology, and operations and finance. Moreover, the Company has demonstrated a consistent commitment to Board refreshment, having added six directors over the last three years.1

Bristol-Myers Squibb and Celgene continue to expect that the transaction will close in the third quarter of 2019, subject to approval by Bristol-Myers Squibb and Celgene stockholders and the satisfaction of customary closing conditions and regulatory approvals.

If Bristol-Myers Squibb stockholders have any questions or require assistance in voting their shares of Bristol-Myers Squibb stock, they should call MacKenzie Partners, Inc., Bristol-Myers Squibb’s proxy solicitor for its special meeting, toll-free at (800) 322-2885 or at (212) 929-5500.

Date: March 4, 2019

Source: Bristol Myers Squibb