NEW YORK: New York-based pharmaceutical giant Bristol-Myers Squibb on Thursday announced it would buy US biotech firm Celgene in a $74 billion cash-and-stock deal, instantly creating a rival to the world’s largest drug makers.

The merger plans underscored the companies’ efforts to diversify in the field of cancer treatments, with investors in recent months questioning their growth prospects.

In the deal, Bristol-Myers Squibb gains Celgene’s blockbuster Revlimid treatment for multiple myeloma. The companies said the new entity would also offer nine products with more than $1bn in annual sales.

Bristol-Myers Squibb Chairman and CEO Giovanni Caforio said in a statement the combined companies would also enjoy “a deep and broad pipeline that will drive sustainable growth.” They also pointed to oncology, immunology, inflammation and cardiovascular disease as important growth areas.

“We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches,” Caforio said in the statement.

Other advantages of the deal include a number of new product launches expected in the next 12 months and extensive cost savings. Executives described company assets as “complementary” and with the potential to create “the preeminent global bio-pharmaceutical company,” according to a conference call with analysts.

The transaction follows other recent large pharma deals, including French company Sanofi’s purchase of US hemophilia group Bioverativ for $11.6bn and Novartis’ $8.7bn acquisition of rare-disease treatment company AveXis.

Both companies had been the subject of merger speculation, with investors saying Bristol-Myers’s big seller Opdivo, a cancer medication, had lost market share to rival Merck.

Celgene meanwhile faced the prospect of mounting competition from copycat drugs as patents begin to expire.

Published in Dawn, January 4th, 2019