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News > Deals
Bristol in ImClone stake
September 19, 2001: 1:04 p.m. ET

Drugmaker inks $1B purchase of 20 percent stake in biotech company
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NEW YORK (CNNfn) - Bristol-Myers Squibb Co. agreed Wednesday to purchase a 20 percent stake in biotech developer ImClone Systems Inc. for $1 billion cash, signaling a move by Bristol to strengthen its position in the cancer treatment market.

Princeton, N.J.-based Bristol-Myers will pay $70 a share for about 14.4 million ImClone shares, a near $20 per share premium over ImClone's Tuesday closing price of $50.01. The transaction will dilute Bristol's earnings per share by 5 cents to 7 cents in 2002 and also in 2003, the company said.

The agreement, which extends until at least 2018, will add to earnings thereafter. The purchase is subject to regulatory approval and conditions, Bristol said.

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Shares of Bristol fell nearly 2 percent Wednesday in midday trading, while ImClone surged nearly 6 percent.

New York-based ImClone (IMCL: up $2.62 to $52.63, Research, Estimates) will receive $1 billion in three cash payments once it achieves certain milestones. ImClone will receive the first disbursement for signing the agreement, the second upon completing a license application for Biologics to the Food & Drug Administration, and the last for marketing approval of IM-C225, a drug designed to treat cancer.

Bristol has also agreed to co-develop and co market IMC-225 in the United States, Canada and Japan. The drug has the potential to treat several cancers including colon, head and neck, pancreatic and non-small cell lung cancers.

"As the worldwide leader in cancer drug development, Bristol-Myers Squibb is constantly searching for breakthrough medicines to help patients in need and ImClone Systems' IMC-C225 represents one of the most important advances in cancer medicine since the introduction of TAXOL (paclitaxel) in 1991," said Bristol-Myers Chairman and CEO Peter Dolan in a statement.

Bristol-Myers' (BMY: down $0.94 to $55.55, Research, Estimates) share of the cancer treatment market has dropped to 21 percent from 37 percent in 1996, mostly due to the patent expiration of its cancer treatment drug Taxol and an FDA rejection on its Orzel medication, the Wall Street Journal said Wednesday, citing IMS Health.

News of the transaction was first reported by the Journal.

The move to bolster its place in the cancer market comes after New York-based Bristol sold its beauty care business, spun off its orthopedic unit, and bought the drug manufacturing operations of DuPont Co. (DD: Research, Estimates)graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.