AstraZeneca Reportedly Explored Acquisition of Bristol Myers Squibb in Potential Megadeal
Key Takeaways
- •AstraZeneca has engaged in preliminary talks about acquiring Bristol Myers Squibb, though it remains uncertain whether the discussions will produce a transaction.
- •Bristol Myers Squibb is approaching patent expirations for Eliquis and Opdivo, two products that together generate approximately half of the company's total revenue.
- •Bristol Myers Squibb recently reported its highest-ever quarterly sales at $13 billion, driven primarily by newer products such as Breyanzi, Opdualag, and Camzyos.
- •A combined AstraZeneca and Bristol Myers Squibb would rank among the largest pharmaceutical mergers in history but could draw antitrust scrutiny from U.S. regulators due to overlapping oncology portfolios.
- •AstraZeneca, which has grown significantly through its oncology franchise and the $39 billion acquisition of Alexion in 2021, would gain a substantially larger foothold in the U.S. pharmaceutical market through the deal.
AstraZeneca Plc has explored a potential acquisition of Bristol Myers Squibb Co., according to people familiar with the matter, in what would be a megadeal creating one of the world's largest pharmaceutical companies.
The two companies have held early-stage discussions about a possible combination, the sources said, speaking on condition of anonymity because the matter remains private. It is unclear whether the talks are still ongoing or whether they will ultimately lead to a transaction, the people cautioned.
A representative for AstraZeneca declined to comment. Bristol Myers Squibb could not immediately be reached for comment. The discussions were first reported by the Financial Times.
Bristol Myers Squibb, with a market capitalization of approximately $133 billion, could offer AstraZeneca a significantly larger foothold in the United States pharmaceutical market. AstraZeneca, headquartered in Cambridge, United Kingdom, currently has a market value of roughly £196 billion ($264 billion). The company has grown substantially in recent years, driven largely by its oncology franchise and rare disease portfolio, the latter bolstered by its roughly $39 billion acquisition of Alexion Pharmaceuticals in 2021.
Bristol Myers Squibb is facing upcoming loss of patent protection for several of its top-selling products, including the blood thinner Eliquis and the cancer immunotherapy Opdivo. Together, these two drugs account for roughly half of Bristol's total revenue. The patent cliff has put pressure on the New York-based drugmaker to diversify its revenue base. Bristol Myers itself expanded through a $74 billion acquisition of Celgene in 2019, which brought in the blockbuster blood cancer drug Revlimit and other oncology assets.
Last week, Bristol Myers Squibb reported quarterly sales of $13 billion, its highest-ever quarterly figure. The growth was primarily driven by newer products, including the blood cancer treatment Breyanzi, Opdualag for skin cancer, and the heart drug Camzyos.
A combination of AstraZeneca and Bristol Myers Squibb would rank among the largest pharmaceutical mergers in history, reflecting a broader trend of consolidation in an industry where companies increasingly seek scale to offset patent expirations and fund drug development. Both companies have significant oncology portfolios, which could draw antitrust scrutiny from U.S. regulators, who have shown increased willingness to challenge healthcare mergers under the current Federal Trade Commission.
This story was originally featured on Fortune.com.