Bristol-Myers Squibb Board of Directors Sends Letter to Shareholders Highlighting the Compelling Strategic and Financial Rationale of the Celgene Transaction; Company Provides Additional Investor Materials

March 25, 2019 Off By BusinessWire

Urges Shareholders to Vote “FOR” the Proposed Transaction on the WHITE
Proxy Card

NEW YORK–(BUSINESS WIRE)–Bristol-Myers Squibb Company’s (NYSE:BMY) Board of Directors today sent
an open letter to the Company’s shareholders regarding the previously
announced definitive merger agreement with Celgene Corporation
(NASDAQ:CELG). In addition to its March 19 investor presentation, the
Company today also made available on Bristol-Myers Squibb’s website at www.bestofbiopharma.com
and later today will file with the Securities and Exchange
Commission (SEC) an investor presentation providing an overview of
Bristol-Myers Squibb’s ability to derive value from Celgene’s pipeline
and a Fact Sheet providing additional detail on key benefits of the
transaction.

The full text of the letter from the Board of Directors to shareholders
follows:

Dear Fellow Shareholder:

The Board of Directors of Bristol-Myers Squibb unanimously and strongly
supports the proposed acquisition of Celgene. This transaction
represents a unique opportunity to create a stronger Bristol-Myers
Squibb and deliver significant value for all shareholders. The combined
company will be stronger today, and better positioned for sustainable
long-term growth. We disagree with those shareholders that have
expressed concerns with some aspects of the transaction. Your Board has
conducted a rigorous evaluation process, and is highly confident that
this is the best strategic option for the Company at this time. We ask
for your support, and recommend that you vote your shares “FOR” the
proposed transaction with Celgene.

Bristol-Myers Squibb has long been one of the world’s leading global
biopharmaceutical companies whose mission is to discover, develop and
deliver innovative medicines that help patients prevail over serious
diseases. We believe this transaction is the best option to advance that
mission, and to continue to deliver innovative medicines to our patients
as a means to create long-term value for our fellow shareholders.

Our strategy has involved creating some of the leading franchises in the
world from both internally developed and externally acquired sources.
Leveraging our strong commercialization capabilities, we have developed
five products that each currently drive over a billion dollars in annual
sales, including two of the 10 largest selling drugs in the pharma
industry in 2018.

By successfully executing this strategy, we have delivered financial and
operational outperformance, including consistent and peer-exceeding
increases in revenue, earnings and margins over the last five years. Our
acute focus on sustainable growth has resulted in Bristol-Myers Squibb
generating 60% of 2018 sales from new products launched over the last
five years. The acquisition of Celgene takes the Company to its next
chapter in a way that is fully aligned with this strategic foundation.

Bristol-Myers Squibb has transformed its product portfolio more than
once, by investing internally and externally with foresight focused on
our long-term growth prospects. Our business development effort has been
grounded in three main pillars: (1) strategic alignment with
therapeutic areas we know well, (2) compelling science focused on
transformational medicines and (3) financial discipline. We believe the
Celgene acquisition fits very well with these three pillars, as outlined
below.

Through our broad development program and best-in-industry commercial
execution, Bristol-Myers Squibb has successfully built two strong growth
franchises, Eliquis and Opdivo, that currently represent ~60% of our
total sales and have significant opportunity for further growth. While
we expect Eliquis and Opdivo to maintain their growth well into the next
decade, we are conscious of the fact that in our industry science is
always evolving, product development cycles are long and these products
will face eventual losses of exclusivity (Eliquis in 2026 and Opdivo
beginning in 2028). As stewards for our shareholders and our patients,
the Board and management team understand that now is the time to ensure
that we will continue to have a robust pipeline for future growth.

Accordingly, as part of our annual comprehensive strategic review
process focused on sustaining long-term growth, Bristol-Myers Squibb
evaluated a full range of business development opportunities. The
process was overseen by a Board comprised of directors with substantial
operating experience, financial acumen, scientific expertise and
investor perspectives, 10 of whom are independent including five
directors who have joined the Board in the past three years.

Having reviewed a full range of opportunities, from small collaborations
to transformational combinations, we identified Celgene as by far the
most compelling opportunity for Bristol-Myers Squibb and its
shareholders, given its strategic fit in therapeutic areas we know well,
attractive value, and its unique late-stage candidates and diversified
but complementary Phase 1 and 2 pipeline. The timing of the transaction
was also favorable both in the near-term, as we were able to secure a
very favorable price, and for the long-term, as Bristol-Myers Squibb
will be strengthened and diversified (focused within our chosen
therapeutic areas of oncology and immunology) in an increasingly
competitive environment.

In short, the Board firmly believes that the Celgene acquisition is the
right transaction at the right time for our shareholders.

A POWERFUL VALUE CREATION OPPORTUNITY FOR OUR
SHAREHOLDERS

As described in greater detail in the Fact Sheet regarding this
transaction, our March 19 investor presentation and our presentation
regarding our ability to deliver value from Celgene’s pipeline,1
the Celgene transaction will deliver compelling value to all
Bristol-Myers Squibb shareholders. The transaction will deliver:

  • Enhanced product leadership: The combined company will
    be #1 in oncology, #1 in cardiovascular and top 5 in immunology and
    inflammation, all of which are substantial growth areas
  • Diversification: Nine current products each with over $1
    billion in annual sales, six near-term product launch candidates, a
    combined total of >50 Phase 1 and Phase 2 clinical programs and more
    “shots on goal”

    • Significantly reduced concentration of Bristol-Myers Squibb’s top
      3 products in 2025 (from approximately 70% of sales on a
      standalone basis to approximately 45% of sales on a combined basis)
  • A strong late-stage pipeline: This combined pipeline
    includes six expected near-term product launches (including five from
    Celgene) representing more than $15 billion in non-risk adjusted
    revenue potential; of the six near-term product launches, three
    (ozanimod, luspatercept and fedratinib) are substantially de-risked
    with completed Phase 3 trials and completed or near-term submissions
    to the FDA for approval

    • Bristol-Myers Squibb’s projected total sales from Celgene’s “Big
      5” (luspatercept, fedratinib, liso-cel (JCAR017), bb2121 and
      ozanimod) in 2025 are consistent with Street forecasts
    • Celgene’s “Big 5” are all first-in-class or potentially
      best-in-class, substantially de-risked assets with potential
      near-term approvals and expected to be launched in the next 12-24
      months; three out of the “Big 5” have completed Phase 3/pivotal
      trials and two have been submitted for regulatory approval
    • Celgene contributes an enhanced and differentiated platform in the
      CAR-T space, which has significant long-term potential in oncology
      given the unprecedented efficacy demonstrated by this modality
    • The Celgene pipeline combined with Bristol-Myers Squibb’s proven
      and leading commercialization strength will drive tremendous value
      opportunities for our shareholders
  • A robust early-stage development pipeline: The
    combined pipeline includes 20 compounds in oncology IO / solid tumors,
    11 in oncology/hematology, 9 in cardiovascular/fibrosis and 11 in
    immunology & inflammation
  • A conservative valuation of currently marketed products:
    Our valuation of Celgene’s marketed products was underpinned by
    conservative Revlimid forecasts. Recent positive US Patent and
    Trademark Office rulings make us even more confident about Revlimid
  • Specific, actionable synergies: The Company has
    done extensive due diligence to determine the $2.5 billion of
    sustainable, long-term synergies with identifiable sources from both
    current Bristol-Myers Squibb and Celgene operations. These synergies
    are durable given the long-term sustainability of the combined
    companies, included the strength of Celgene’s 5 late stage assets and
    broad early stage pipeline
  • Ideal timing: Trading ratio at two-year lows and
    Celgene P/E near an all-time low when deal was announced
  • Continued financial flexibility: Continued
    dividend increases and accelerated share repurchase of $5 billion
    expected to be executed subject to the closing of the transaction,
    market conditions and Board approval
  • A compelling value proposition: Greater than 40%
    accretion to Bristol-Myers Squibb standalone EPS in the first year and
    accretive each year thereafter through 2025, approximately 10%
    accretive on a discounted cash flow per share basis and IRR of 11%
    substantially above cost of capital. The transaction also delivers
    long-term strategic, operational and financial value – the combined
    company will have sales and earnings increases every year through
    2025, and the robust pipeline provides us with many more “shots on
    goal” in areas that are directly aligned with our therapeutic
    strengths while continuing to provide financial flexibility to
    opportunistically source innovation externally

Before embarking on this important transaction, the Board of Directors
thoroughly evaluated the acquisition against other alternatives for
value creation. The nature of patent cycles in our industry means that
companies like ours need to constantly rejuvenate themselves to stay
ahead. Bristol-Myers Squibb has done this successfully over the past
decade, and now we are focused on executing a program to supplement and
eventually replace Opdivo and Eliquis – and sustaining our leadership
for the future.

We don’t agree with recent suggestions to aggressively cut R&D and
pursue leveraged share repurchases. Given that we operate in an industry
that thrives on innovation, this approach is inconsistent with the
creation of both sustainable revenue growth and long-term shareholder
value. Similarly, in today’s competitive and often overpriced
environment for business development, we determined that pursuing a
‘string-of-pearls’ approach to pipeline development would not deliver
value or pipeline opportunities that are as compelling as acquiring
Celgene.

To that end, Jim Cornelius, who initiated the ‘string-of -pearls’
strategy when he was Chairman and CEO of Bristol-Myers Squibb, agrees
that the transaction with Celgene is the next natural step in
Bristol-Myers Squibb’s evolution:

“The Celgene transaction enables Bristol-Myers Squibb to buy the “whole
necklace” rather than stringing together individual assets. This path
forward is a smart move for the long term as it eliminates paying
potentially high individual premiums and minimizes certain risks
associated with several smaller transactions. Bristol-Myers Squibb and
Celgene are a strong strategic and cultural fit and I have already voted
100% of my Bristol-Myers Squibb shares in favor of the transaction. I
have the utmost confidence the Bristol-Myers Squibb management team can
deliver significant value through this deal and move the pipeline
forward through commercial execution.”

Bristol-Myers Squibb is a strong company today with our core franchises
and internal pipeline. The Celgene transaction is a unique and
compelling opportunity to diversify and further strengthen the Company,
both strategically and financially, now and in the future.

For these reasons, the Bristol-Myers Squibb Board unanimously and
strongly believes that the Celgene acquisition is the right transaction
at the right time for Bristol-Myers Squibb shareholders – and recommends
that you vote your shares “FOR” the proposed transaction with
Celgene by signing, dating and returning the Company’s WHITE
proxy card at your earliest convenience.

Thank you for your investment and continued support of the Company.

Sincerely,

The Bristol-Myers Squibb Board of Directors

 
/s/ Giovanni Caforio

Giovanni Caforio, M.D.,

Chairman and CEO

 

/s/ Robert J. Bertolini,

Robert J. Bertolini

 

/s/ Alan J. Lacy,
Alan J. Lacy

 

/s/ Gerald L. Storch,

Gerald L. Storch

/s/ Vicki L. Sato, Ph.D.

Vicki L. Sato, Ph.D.,

Lead Independent Director

 

/s/ Matthew W. Emmens,

Matthew W. Emmens

 

/s/ Dinesh C. Paliwal,
Dinesh C. Paliwal

 

/s/ Karen H. Vousden, Ph.D.,
Karen H. Vousden, Ph.D.

/s/ Peter J. Arduini,

Peter J. Arduini

 

 

/s/ Michael Grobstein,

Michael Grobstein

 

/s/ Theodore R. Samuels,
Theodore R. Samuels

 

The Bristol-Myers Squibb Board unanimously recommends that
Bristol-Myers Squibb shareholders vote their shares “FOR” the approval
of the issuance of shares of the Company’s common stock in connection
with our proposed acquisition of Celgene
prior to the Special
Meeting, which will be held on April 12, 2019.
All Bristol-Myers
Squibb shareholders of record as of the close of business on March 1,
2019 will be entitled to vote their shares.

Bristol-Myers Squibb urges shareholders to discard any blue proxy cards
and disregard any related solicitation materials sent to you by
Starboard Value LP, which is soliciting proxies from Bristol-Myers
Squibb shareholders against approving the merger. Irrespective of
whether shareholders previously submitted a blue proxy card pertaining
to the proposals contained in Bristol-Myers Squibb’s definitive proxy
statement, the Company urges shareholders to cast their vote on the WHITE
proxy card “FOR” the proposal to approve the transaction.

 

If you have any questions, require assistance with voting your
proxy card,

or need additional copies of proxy material, please contact
MacKenzie Partners.

 

1407 Broadway, 27th Floor

New York, NY 10018

[email protected]

(212) 929-5500 or Toll-Free (800) 322-2885

 

About Bristol-Myers Squibb

Bristol-Myers Squibb is a global biopharmaceutical company whose mission
is to discover, develop and deliver innovative medicines that help
patients prevail over serious diseases. For more information about
Bristol-Myers Squibb, visit us at BMS.com or
follow us on LinkedIn,
Twitter,
YouTube
and Facebook.

Important Information For Investors And Stockholders

This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval. It does not constitute a prospectus or prospectus
equivalent document. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.

In connection with the proposed transaction between Bristol-Myers Squibb
Company (“Bristol-Myers Squibb”) and Celgene Corporation (“Celgene”), on
February 1, 2019, Bristol-Myers Squibb filed with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form S-4, as
amended on February 1, 2019 and February 20, 2019, containing a joint
proxy statement of Bristol-Myers Squibb and Celgene that also
constitutes a prospectus of Bristol-Myers Squibb. The registration
statement was declared effective by the SEC on February 22, 2019, and
Bristol-Myers Squibb and Celgene commenced mailing the definitive joint
proxy statement/prospectus to stockholders of Bristol-Myers Squibb and
Celgene on or about February 22, 2019. INVESTORS AND SECURITY HOLDERS OF
BRISTOL-MYERS SQUIBB AND CELGENE ARE URGED TO READ THE DEFINITIVE JOINT
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED OR THAT WILL BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders
will be able to obtain free copies of the registration statement and the
definitive joint proxy statement/prospectus and other documents filed
with the SEC by Bristol-Myers Squibb or Celgene through the website
maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Bristol-Myers Squibb are
available free of charge on Bristol-Myers Squibb’s internet website at http://www.bms.com
under the tab, “Investors” and under the heading “Financial Reporting”
and subheading “SEC Filings” or by contacting Bristol-Myers Squibb’s
Investor Relations Department through https://www.bms.com/investors/investor-contacts.html.
Copies of the documents filed with the SEC by Celgene are available free
of charge on Celgene’s internet website at http://www.celgene.com
under the tab “Investors” and under the heading “Financial Information”
and subheading “SEC Filings” or by contacting Celgene’s Investor
Relations Department at [email protected].

Certain Information Regarding Participants

Bristol-Myers Squibb, Celgene, and their respective directors and
executive officers may be considered participants in the solicitation of
proxies in connection with the proposed transaction. Information about
the directors and executive officers of Bristol-Myers Squibb is set
forth in its Annual Report on Form 10-K for the year ended December 31,
2018, which was filed with the SEC on February 25, 2019, its proxy
statement for its 2018 annual meeting of stockholders, which was filed
with the SEC on March 22, 2018, and its Current Report on Form 8-K,
which was filed with the SEC on August 28, 2018. Information about the
directors and executive officers of Celgene is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2018, which was
filed with the SEC on February 26, 2019, as amended on March 1, 2019.
Other information regarding the participants in the proxy solicitations
and a description of their direct and indirect interests, by security
holdings or otherwise, are contained in the definitive joint proxy
statement/prospectus of Bristol-Myers Squibb and Celgene filed with the
SEC and other relevant materials to be filed with the SEC regarding the
proposed transaction when they become available. You may obtain these
documents (when they become available) free of charge through the
website maintained by the SEC at http://www.sec.gov
and from Investor Relations at Bristol-Myers Squibb or Celgene as
described above.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. You can
generally identify forward-looking statements by the use of
forward-looking terminology such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,”
“might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” or
“will,” or the negative thereof or other variations thereon or
comparable terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties, many
of which are beyond Bristol-Myers Squibb’s and Celgene’s control.

Statements in this communication regarding Bristol-Myers Squibb, Celgene
and the combined company that are forward-looking, including projections
as to the anticipated benefits of the proposed transaction, the impact
of the proposed transaction on Bristol-Myers Squibb’s and Celgene’s
business and future financial and operating results, the amount and
timing of synergies from the proposed transaction, the terms and scope
of the expected financing for the proposed transaction, the aggregate
amount of indebtedness of the combined company following the closing of
the proposed transaction, expectations regarding cash flow generation,
accretion to cash earnings per share, capital structure, debt repayment,
and credit ratings following the closing of the proposed transaction,
Bristol-Myers Squibb’s ability and intent to conduct a share repurchase
program and declare future dividend payments, the combined company’s
pipeline, intellectual property protection and R&D spend, the timing and
probability of a payment pursuant to the contingent value right
consideration, and the closing date for the proposed transaction, are
based on management’s estimates, assumptions and projections, and are
subject to significant uncertainties and other factors, many of which
are beyond Bristol-Myers Squibb’s and Celgene’s control. These factors
include, among other things, effects of the continuing implementation of
governmental laws and regulations related to Medicare, Medicaid,
Medicaid managed care organizations and entities under the Public Health
Service 340B program, pharmaceutical rebates and reimbursement, market
factors, competitive product development and approvals, pricing controls
and pressures (including changes in rules and practices of managed care
groups and institutional and governmental purchasers), economic
conditions such as interest rate and currency exchange rate
fluctuations, judicial decisions, claims and concerns that may arise
regarding the safety and efficacy of in-line products and product
candidates, changes to wholesaler inventory levels, variability in data
provided by third parties, changes in, and interpretation of,
governmental regulations and legislation affecting domestic or foreign
operations, including tax obligations, changes to business or tax
planning strategies, difficulties and delays in product development,
manufacturing or sales including any potential future recalls, patent
positions and the ultimate outcome of any litigation matter. These
factors also include the combined company’s ability to execute
successfully its strategic plans, including its business development
strategy, the expiration of patents or data protection on certain
products, including assumptions about the combined company’s ability to
retain patent exclusivity of certain products, the impact and result of
governmental investigations, the combined company’s ability to obtain
necessary regulatory approvals or obtaining these without delay, the
risk that the combined company’s products prove to be commercially
successful or that contractual milestones will be achieved. Similarly,
there are uncertainties relating to a number of other important factors,
including: results of clinical trials and preclinical studies, including
subsequent analysis of existing data and new data received from ongoing
and future studies; the content and timing of decisions made by the U.

Contacts

Media:
Carrie Fernandez
609-252-5222
[email protected]
or
Andy
Brimmer / Dan Katcher
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Investors:
Tim
Power
609-252-7509
[email protected]
or
Dan
Burch
MacKenzie Partners, Inc.
212-929-5748
[email protected]

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