Celgene’s merger drama isn’t over yet
The biotech stalwart that was Celgene got metabolized by Bristol-Myers Squibb last year, but the pair’s negotiation produced a lottery ticket that remains very much alive in 2020.
Under that deal, every share of Celgene entitled its owner to a $9 payout if three of the company’s drugs win FDA approval on a certain timeframe. This week, the FDA granted priority review to one of them, the CAR-T therapy JCAR017, which means it's likely to meet its end-of-year approval deadline. Another, the multiple sclerosis treatment ozanimod, is up for approval next month, and Bristol-Myers is apparently confident enough to preemptively launch a website.
And yet those lottery tickets, which can be freely traded, are currently valued at just $3.67 apiece, suggesting the market assigns about a 40% probability of success. That might come down to the third drug in the arrangement, a Bluebird Bio-partnered CAR-T called bb2121. In order for the $9 to pay out, bb2121 needs to win approval by March 31, 2021. That means Bristol-Myers would need to submit it to the FDA by this summer at the latest, or Celgene’s former shareholders will be hanging onto worthless paper.
Under that deal, every share of Celgene entitled its owner to a $9 payout if three of the company’s drugs win FDA approval on a certain timeframe. This week, the FDA granted priority review to one of them, the CAR-T therapy JCAR017, which means it's likely to meet its end-of-year approval deadline. Another, the multiple sclerosis treatment ozanimod, is up for approval next month, and Bristol-Myers is apparently confident enough to preemptively launch a website.
And yet those lottery tickets, which can be freely traded, are currently valued at just $3.67 apiece, suggesting the market assigns about a 40% probability of success. That might come down to the third drug in the arrangement, a Bluebird Bio-partnered CAR-T called bb2121. In order for the $9 to pay out, bb2121 needs to win approval by March 31, 2021. That means Bristol-Myers would need to submit it to the FDA by this summer at the latest, or Celgene’s former shareholders will be hanging onto worthless paper.
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