Sale of psoriasis drug Otezla will clear way for €74m Celgene deal

Amgen will buy Celgene's psoriasis drug Otezla for $13.4 billion (€12.05 billion) in cash, clearing the way for Bristol-Myers Squibb to go ahead with its $74 billion deal for Celgene by the end of the year.

Amgen, which announced the deal on Monday, is paying a hefty price for the drug, analysts and investors said. Still, Otezla will deliver growth for the company right away, and its shares rose about 2 per cent in early trading.

Bristol-Myers and Celgene’s shares were both up about 3 per cent.

Bristol-Myers said in June that it would sell Otezla to allay concerns raised by the Federal Trade Commission because of a competing treatment that it is developing. Analysts said at the time that they were expecting Otezla to sell for between $8 billion and $10 billion.

Trinity Biotech reports drop in revenues as it books €5.1m tax charge

---

Businessman censured in Ireland after firm’s collapse is jailed in US for fraud

---

Medtronic reports quarterly revenue which beats estimates

---

Fusion Antibodies says significant revenue growth achievable

---

Bristol-Myers said in a statement that there was significant interest from multiple potential buyers from early on in the process.

This is an attractive product for them that fits more or less with their current portfolio

Otezla brought in sales of $1.61 billion last year. Amgen, which has an operations facility in Dublin, said it expected the drug’s sales to grow at least in the low double digits over the next five years.

Patent protection

Jeff Jonas, healthcare portfolio manager at Gabelli funds, said that a number of Amgen’s current drugs face loss of patent protection and competition from biosimilar drugs, so the growth from Otezla would be welcome.

“This is an attractive product for them that fits more or less with their current portfolio,” he said. “It’s an approved product with a good safety profile, so there’s not a lot of risk.”

Still, he expressed some scepticism about Amgen’s growth forecast for the drug, noting that new competitors, including Bristol-Myers’s drug in development, are likely to eat into its market share.

Amgen said it expects the deal to produce tax benefits with a present cash value of $2.2 billion, reducing the actual deal total to $11.2 billion. Bristol-Myers said most of the proceeds from the sale will go to pay down debt from the Celgene deal. It also increased a previously planned $5 billion accelerated share buyback to $7 billion. – Reuters