Bristol-Myers Squibb denies defensive strategy

In the face of growing criticism from shareholders, Bristol-Myers Squibb CEO Giovanni Caforio reiterated this week that the company's proposed $74-billion acquisition of Celgene is not designed to fend-off a takeover of the company. This "is not [a] defensive deal," Caforio said, as the drugmaker looks to persuade investors to support the transaction ahead of an April 12 vote.

In a note to investors published late last week, Wolfe Research analyst Tim Anderson suggested that when probed by sell-side analysts, Bristol-Myers Squibb management has so far "stopped short of saying whether there has been any informal indication of interest in Bristol-Myers Squibb by another party, which still leaves open a possible motive for the transaction." 

Anderson added "our belief remains that Bristol-Myers Squibb actions are in fact partly designed to prevent itself from being acquired – whether there was informal interest recently, or whether Bristol-Myers Squibb is merely anticipating this as a future risk, is not clear, however."

Caforio received an important boost on March 14 when it was announced that US Patent Office's Patent Trial and Appeal Board (PTAB) declined to a request from generics manufacturer Alvogen to review a patent covering Celgene’s Revlimid (lenalidomide), ensuring the myeloma blockbuster is protected until 2023 and removing a small but critical concern about the deal for Bristol-Myers Squibb shareholders.

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