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Bristol-Myers Squibb is buying Celgene. Photo: John Greim/LightRocket via Getty Images

Bristol-Myers Squibb is acquiring Celgene in a stock-and-cash deal worth $74 billion, creating a pharmaceutical giant with roughly $37 billion in annual drug sales.

Why it matters: This is one of the largest drug company buyouts ever, combining two firms that are making a lot of money. However, Celgene has struggled to evolve over the past few years as its top product, the blood cancer drug Revlimid, loses patent protection — which has spurred a sell-off in Bristol-Myers' stock.

The details: Celgene's investors will receive one share of Bristol-Myers' stock and $50 for every share of Celgene they own, and they could earn extra cash if three Celgene drugs obtain federal approval by certain dates.

  • Several Celgene executives would get a huge payday if both companies approve the deal. That includes former Celgene CEO and failed Senate candidate Bob Hugin, who would immediately cash out $185 million and hold an additional 3.7 million shares of Bristol-Myers.
  • Both firms expect to cut $2.5 billion in costs by 2022, and a lot of those likely will come from laying off Celgene's scientists and other staff.

The big picture: Bristol-Myers and Celgene are still highly profitable companies within the health care industry, and the deal would turn Bristol-Myers into one of the largest cancer drug companies in the world.

My thought bubble: It's also a remarkably generous deal for Celgene. The company is heavily dependent on Revlimid, a high-priced drug that makes up two-thirds of its revenue and faces cheaper alternatives in the next few years. Regulators also have criticized Celgene for delaying generic competition. Bristol-Meyers is essentially banking on the success of Celgene's newly acquired drugs, like the cancer ones made by Juno Therapeutics.

Go deeper

2 hours ago - World

Special report: Trump's U.S.-China transformation

Illustration: Aïda Amer/Axios

President Trump began his term by launching the trade war with China he had promised on the campaign trail. By mid-2020, however, Trump was no longer the public face of China policy-making as he became increasingly consumed with domestic troubles, giving his top aides carte blanche to pursue a cascade of tough-on-China policies.

Why it matters: Trump alone did not reshape the China relationship. But his trade war shattered global norms, paving the way for administration officials to pursue policies that just a few years earlier would have been unthinkable.

McConnell: Trump "provoked" Capitol mob

Senate Majority Leader Mitch McConnell (R-Ky.) said on Tuesday that the pro-Trump mob that stormed the U.S. Capitol on Jan. 6 was "provoked by the president and other powerful people."

Why it matters: Trump was impeached by the House last week for "incitement of insurrection." McConnell has not said how he will vote in Trump's coming Senate impeachment trial, but sources told Axios' Mike Allen that the chances of him voting to convict are higher than 50%.

3 hours ago - Politics & Policy

GOP leaders skip Trump sendoff in favor of church with Biden

House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Kevin McCarthy (R-Calif.) in July. Photo by Erin Scott-Pool/Getty Images

Congressional leaders, including House GOP leader Kevin McCarthy and Senate Majority Leader Mitch McConnell, will skip President Trump's departure ceremony in Maryland tomorrow morning in favor of attending mass with incoming President Joe Biden ahead of his inauguration, congressional sources familiar with their plans tell Axios.

Why it matters: Their decision is a clear sign of unity before Biden takes the oath of office.

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