Yesterday, Bristol-Myers Squibb Co. (BMY) announced that its cash tender offer to purchase all outstanding shares of common stock of Medarex Inc. (MEDX) expired on Aug. 26. The tender offer was not extended, unlike the previous instance when the offer originally scheduled to close on August 24 was extended by two days.
The cash tender offer saw 87.7% of Medarex shares outstanding, or a total of 119 million shares, being tendered. With an objective of acquiring the remaining Medarex stock, Bristol announced a subsequent offering period from yesterday until August 31, 2009, unless extended.
The Bristol management believes that the completion of the deal would be hastened if more than 90% Medarex shares are tendered. Even if the new tender offer fails to attain this goal, the deal is expected to close by year end.
In July 2009, Bristol-Myers announced that it would pay $16 per share to acquire Medarex. Earlier in the month, the $2.1 billion deal cleared the mandatory review by antitrust regulators, thus allowing the transaction to go forward.
With the Medarex acquisition, Bristol-Myers will gain access to the UltiMAb Human Antibody Development System, which produces high affinity, fully human antibodies for use in a broad range of therapeutic areas, including immunology and oncology. Bristol-Myers will also acquire Medarex’s next-generation Antibody-Drug Conjugate (ADC) technology, which is a novel and proprietary platform that could open new fields in oncology drug development.
Medarex’s pipeline includes seven antibodies under development under its sole sponsorship and three other antibodies which are being co-developed with partners. Importantly, Bristol-Myers will acquire full ownership and rights to ipilimumab, which, if approved, could be a significant contributor to the company’s future growth.
The acquisition of Medarex is aimed to counter the loss of revenues that will arise once the company loses exclusivity on its key product Plavix in 2011. Additionally, Bristol is working to build a strong pipeline of candidates that could contribute to revenues in the coming years. Additionally, management is aiming to reduce costs and is shedding less profitable and non-core businesses.
We currently have an Outperform rating on Bristol-Myers Squibb.
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