Starboard Believes the Proposed Merger with Celgene is ill-Advised and Not in the Best Interests of Bristol-Myers Stockholders

Read the March 18th Investor Presentation Opposing the Proposed Transaction

As detailed in our Investor Presentation and February 28th open letter to stockholders, our conclusion that Bristol-Myers’ proposed acquisition of Celgene is ill-advised and not in the best interests of stockholders is based on five primary views:

  1. Bristol-Myers is buying a company with a massive patent cliff – among the largest in pharmaceutical industry history – which we believe will serve as a major overhang on the Company’s shares in the years to come. Based on our analysis, the patent cliff caused by REVLIMID alone will require Celgene to replace over 60% of its total revenue in the next 7 years.
  2. We believe the Celgene pipeline is extremely risky and will continue to require significant research & development (R&D) funding. Bristol-Myers management’s projections contemplate Celgene essentially rebuilding its entire current revenue base from its pipeline over the next 8 years, as essentially all of Celgene’s marketed products lose patent protection over this timeframe. We believe this is an aggressive assumption and may not be realistic based on historical precedents.
  3. The process and diligence timelines leading up to the announcement of the acquisition, as outlined in the Company’s S-4, lead us to believe that this transaction was hastily construed and perhaps done to thwart potential strategic interest in Bristol-Myers. We believe that if the Company remains independent, it is quite possible that there may be strategic interest in Bristol-Myers at a substantial premium to the current stock price.
  4. We believe Bristol-Myers’ analysis of the financial merits of the transaction – specifically its allocation of value between Celgene’s marketed products, the combined synergies, and the Celgene pipeline – is potentially misleading based on our diligence.
  5. We believe there is a better path forward for Bristol-Myers, either as a more profitable standalone company with a more focused, lower-risk strategy, or in a potential sale of the whole Company.