Bristol Myers Deal Hunter Sees Divide Over What Assets Cost

(Bloomberg) -- Bristol Myers Squibb Co. has been a prolific dealmaker in recent years, entrenching itself as a top maker of cancer treatments with its acquisition of Celgene in 2019. Industry watchers are now wondering about their next move.

Deals are an important engine of the pharmaceutical business. Mergers, acquisitions and partnerships help companies replenish their portfolios and expand their scientific ambitions. But finding the right deal for the right price can be a challenge. 

On Monday, Bristol Myers announced a licensing agreement with Century Therapeutics to develop and commercialize cell therapies for cancer. Century will receive $100 million up front, a $50 million equity investment and potentially up to $3 billion in additional payments. 

With the annual JPMorgan Healthcare Conference on tap this week, Bloomberg spoke with some of the industry’s top architects of mergers and acquisitions about what they expect in 2022. This installment features Elizabeth Mily, executive vice president of strategy and business development at Bristol Myers. The interview has been edited for clarity and length. 

Bloomberg: What was your vision when you were hired in 2020?

A: When I got the call, BMS was at an inflection point, having just acquired and closed the Celgene acquisition. At the same time, Chief Executive Officer Giovanni Caforio was clearly focused on ensuring there was the right investment to support the long-term growth of the company. 

We’re pleased to have the financial flexibility to continue to make the investments that we see are important. We’ve felt fortunate not to miss a beat during the pandemic given the importance of continuous business development for our earlier, mid-stage pipeline and later opportunities. 

Bloomberg: What opportunities excite you?

A: Our longstanding history is one of the leading oncology companies. Through the acquisition of Celgene, we married that with the largest and preeminent franchise in hematology. We have an early but exciting early commercial franchise in cell therapy. We also have one of the longest histories in the cardiovascular arena. Those are all really core foundational pillars for BMS. We’re excited about our growing immunology space. 

We try not to rule things out just because they aren’t necessarily in our therapeutic footprint today, but at the same time we do try and stay pretty disciplined. 

Bloomberg: How does all the money flooding into the space affect your ability to strike deals?

A: There’s been no need for companies to turn to pharma to be a financial supporter because money has been available from private and public investors. Even with the biotech market being under pretty significant pressure, it doesn’t change the fact that figuring out how you can get to a deal that makes sense for both the buyer and the seller remains very hard because you have to agree on what the valuation potential is.

If you end up with a much more sustained period of time where asset values are depressed, people’s expectations will reset. But right now, I don’t know that people’s expectations have reset sufficiently. 

Bloomberg: Are you factoring the new regime at the Federal Trade Commission into your decisions? 

A: I would never want to speculate on the FTC’s actions or intentions, but I do think I and every other business leader welcome certainty from our regulators. It may well have an impact on how companies think about future deals and their risk tolerance, but I don’t think it changes for the industry nor for us how we think about the deals that we would want to do. And I don’t think it makes deals go away.

Bloomberg: What do you envision for the future of doing business? 

A: I’ll take the example of the J.P. Morgan Healthcare Conference. While it can be really draining, there’s just so much that goes on. You’re kicking off dialog for the year around what’s new, what’s happening, new business development. It’s a time to catch up with people you’ve known for a long time and to meet new people. 

We host 300-odd meetings with collaboration partners, both large and small. A lot of energy comes out of that meeting. While we can be efficient using Microsoft Teams or Zoom, the reality is that face-to-face interaction still adds a lot of benefit. 

I don’t think we’ll ever go back to 100% in person. The new normal will be more reliant on some form of the virtual medium, but there’s a lot you miss by not being able to meet in person.

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