Bristol-Myers Squibb Co. (BMY) yesterday announced that the regulatory review period for its cash tender offer to acquire Medarex Inc. (MEDX) has expired. On July 28, 2009, Bristol-Myers had initiated an offer to buy all outstanding shares of common stock of Medarex for $16 per share. The clearance of the review, necessary under the anti-trust law, allows the $2.1 billion deal to proceed.
 
With the Medarex acquisition, Bristol-Myers will acquire 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’ pipeline includes seven antibodies in clinical trials under its sole sponsorship and three other antibodies which are being co-developed with other partners. Finally, Bristol-Myers will acquire full ownership and rights to ipilimumab, which, if approved, could be an important contributor to Bristol-Myers’ future growth.
 
Ipilimumab, a novel immunotherapy, is currently in phase III development for the treatment of metastatic melanoma. Ipilimumab is also in an ongoing phase II study for lung cancer as well as phase III studies for adjuvant melanoma and hormone-refractory prostate cancer.
 
The acquisition of Medarex by Bristol-Myers is aimed at combating the loss of revenues that will arise once the company loses exclusivity on its key product Plavix in 2011. Besides this, the company has been working on building a strong pipeline of candidates that could contribute to revenues in the coming years.
 
Additionally, management is working on reducing costs and is shedding less profitable and non-core businesses. We are pleased to see the initiatives taken by the company and believe that the current price represents an attractive entry point for long-term investors.
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