8:53 AM, Aug 26, 2019 — Biopharmaceutical major Celgene (CELG) has agreed to sell the product line for Otezla and related intellectual property to biotechnology company Amgen (AMGN) for a cash purchase price of $13.4 billion.
Otezla, which is a treatment for inflammatory disease, is approved for three indications in the US, with 2018 sales of $1.6 billion, according to a statement issued by Amgen.
The deal comes after Celgene disclosed in January that it had entered into a merger agreement with Bristol-Myers Squibb (BMY) and Burgundy Merger Sub, Inc., a wholly-owned subsidiary of Bristol-Myers Squibb, for Bristol-Myers Squibb to acquire Celgene.
In June, Bristol-Myers Squibb announced the planned divestiture of Otezla in light of concerns raised by the US Federal Trade Commission.
On Monday, Amgen issued a statement saying that it had agreed to acquire the worldwide rights to Otezla, for $13.4 billion in cash, or approximately $11.2 billion, net of the present value of $2.2 billion in anticipated future cash tax benefits.
Amgen said that the acquisition of Otezla, which is expected to be completed by the end of 2019, adds a “high-growth, blockbuster product in a core area”.
It said it sees it as a strong strategic fit given its long-standing expertise in psoriasis and inflammation. The company added that the transaction is expected to have a positive financial impact, including immediate accretion to adjusted earnings per share. It expects at least low double-digit Otezla sales growth, on average, over the next five years.
The consummation of the Otezla divestiture is subject to Bristol-Myers Squibb and Celgene entering into a consent decree with the US Federal Trade Commission.
Companies: Celgene Corporation
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