Bristol Meyers Squibb Stock plunged 7% on Monday after the news that pharmaceutical giant announced proposed acquisition of “Celgene Corporation” will now close later than the originally expected time and also will involve a divestiture of Celgene Corp’s psoriasis drug.
Bristol Meyers Squibb said that it now expects to close the planned $74 billion deal, by end of 2019 or beginning of 2020, revealed though Securities and Exchange Commission filing. It had originally decided to close the takeover deal by the third quarter (3Q). Celgene Corporation stock also fell 5% in Monday trading.
The divestiture of the drug “Otezla” would be helpful for the company to offset the financial leverage after the proposed merger, Bristol Meyers Squibb said. Otezla drug generated approximately $1.6 billion in last fiscal year in terms of revenue for Celgene Corporation, according to a securities filing.
In month of January, Bristol Meyers Squibb announced the acquisition, but has not yet received the approval from Federal Trade Commission (FTC). The shareholders of both healthcare companies had previously approved that takeover deal.
“Bristol-Myers Squibb is committed to working with regulatory authorities around the world on the proposed combination with Celgene. The company is focused on realizing the promise of the transaction, and is continuing to work to complete the transaction on a timely basis,” the company said in a securities filing.