Delaware
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001-01136
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22-0790350
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification Number)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.10 Par Value
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BMY
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New York Stock Exchange
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1.000% Notes due 2025
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BMY25
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New York Stock Exchange
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1.750% Notes due 2035
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BMY35
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New York Stock Exchange
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Bristol-Myers Squibb Contingent Value Rights
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BMY RT
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New York Stock Exchange
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Celgene Contingent Value Rights
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CELG RT
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New York Stock Exchange
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(b) |
Pro Forma Financial Information.
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Exhibit No.
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Description
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Unaudited pro forma condensed combined financial information of Bristol Myers Squibb giving effect to the Merger and Celgene’s disposition of the
OTEZLA® (apremilast) product line on the terms described therein, which includes the unaudited pro forma condensed combined statement of
earnings for the year ended December 31, 2019 and the notes related thereto.
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104
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The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
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Exhibit No.
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Description
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Unaudited pro forma condensed combined financial information of Bristol Myers Squibb giving effect to the Merger and Celgene’s disposition of the
OTEZLA® (apremilast) product line on the terms described therein, which includes the unaudited pro forma condensed combined statement of
earnings for the year ended December 31, 2019 and the notes related thereto.
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104
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The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
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BRISTOL-MYERS SQUIBB COMPANY
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||
Dated: May 19, 2020
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By:
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/s/Katherine R. Kelly
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Name:
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Katherine R. Kelly
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Title:
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Corporate Secretary
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• |
the merger of Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) and Celgene Corporation (“Celgene”), consummated on November 20, 2019, which is referred to herein as the Celgene merger, and related financing, which is referred to herein
as the Celgene merger financing; and
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|
• |
the divestiture of the OTEZLA® (apremilast) product line (“Otezla”), consummated on November 21, 2019, which is referred to herein as the Otezla divestiture.
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Historical
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|||||||||||||||||||||||||||
Bristol-Myers
Squibb
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Celgene after
reclassification(1)
(Note 4)
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Celgene
merger
adjustments
(Note 6)
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Notes
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Celgene
merger
financing
adjustments
(Note 6)
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Notes
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Otezla
divestiture
adjustments
(Note 7)
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Pro forma
combined
company
|
||||||||||||||||||||
Net product sales
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$
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25,174
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$
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15,357
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$
|
-
|
$
|
-
|
$
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(1,748
|
)
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$
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38,784
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||||||||||||||
Alliance and other revenues
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971
|
4
|
-
|
-
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-
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975
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|||||||||||||||||||||
Total Revenues
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26,145
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15,361
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-
|
-
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(1,748
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)
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39,759
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||||||||||||||||||||
Cost of products sold (a)
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8,078
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435
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2,498
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(a),(f),(g)
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-
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(47
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)
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10,965
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|||||||||||||||||||
Marketing, selling and administrative
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4,871
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2,569
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(27
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)
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(g)
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-
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(567
|
)
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6,845
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||||||||||||||||||
Research and development
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6,148
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4,360
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(34
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)
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(g)
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-
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(180
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)
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10,294
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||||||||||||||||||
Amortization of acquired intangibles assets
|
1,135
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386
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7,614
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(a)
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-
|
-
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9,136
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||||||||||||||||||||
Other (income)/expense, net
|
938
|
779
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(440
|
)
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(b),(c),(d),(e)
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136
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(k)
|
21
|
1,434
|
||||||||||||||||||
Total Expenses
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21,170
|
8,529
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9,611
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136
|
(773
|
)
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38,674
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||||||||||||||||||||
Earnings/(Loss) Before Income Taxes
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4,975
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6,832
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(9,611
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)
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(136
|
)
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(975
|
)
|
1,085
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||||||||||||||||||
Provision for income taxes
|
1,515
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862
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(1,575
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)
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(h), (i)
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(28
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)
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(l)
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(224
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)
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550
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||||||||||||||||
Net Earnings/(Loss)
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3,460
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5,970
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(8,036
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)
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(108
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)
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(751
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)
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535
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||||||||||||||||||
Noncontrolling Interest
|
21
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-
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-
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-
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-
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21
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|||||||||||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
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$
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3,439
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$
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5,970
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$
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(8,036
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)
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$
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(108
|
)
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$
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(751
|
)
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$
|
514
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||||||||||||
Earnings per Common Share
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|||||||||||||||||||||||||||
Basic
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$
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2.02
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$
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0.22
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(j)
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||||||||||||||||||||||
Diluted
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$
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2.01
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$
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0.22
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(j)
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||||||||||||||||||||||
Weighted Average Shares
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|||||||||||||||||||||||||||
Basic
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1,705
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2,337
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(j)
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||||||||||||||||||||||||
Diluted
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1,712
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2,388
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(j)
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(a)
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Excludes amortization of acquired intangible assets
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(1)
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Historical Celgene results are for the period from January 1 through November 19, 2019. As the acquisition was completed on November 20, 2019, all Celgene results as of and after this date are included in the historical results of
Bristol-Myers Squibb
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Celgene before
reclassification(1)
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Reclassification(1)
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Notes
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Celgene after
reclassification(1)
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|||||||||||||
Net product sales
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$
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15,431
|
$
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(74
|
)
|
(2)
|
|
$
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15,357
|
|||||||
Alliance and other revenues
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4
|
-
|
4
|
|||||||||||||
Total Revenues
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15,435
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(74
|
)
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15,361
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||||||||||||
Cost of products sold (a)
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537
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(101
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)
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(2),(5)
|
|
435
|
||||||||||
Marketing, selling and administrative
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2,739
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(171
|
)
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(4),(5)
|
|
2,569
|
||||||||||
Research and development
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4,246
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114
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(5)
|
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4,360
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|||||||||||
Amortization of acquired intangible assets
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386
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-
|
386
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|||||||||||||
Acquisition related charges and restructuring, net
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439
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(439
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)
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(3)
|
|
-
|
||||||||||
Interest and investment income, net
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(189
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)
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189
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(3)
|
|
-
|
||||||||||
Interest expense
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(1,201
|
)
|
1,201
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(3)
|
|
-
|
||||||||||
Other (income)/expense, net
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1,646
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(867
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)
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(3),(4)
|
|
779
|
||||||||||
Total Expenses
|
8,603
|
(74
|
)
|
8,529
|
||||||||||||
Earnings/(Loss) Before Income Taxes
|
6,832
|
-
|
6,832
|
|||||||||||||
Provision for income taxes
|
862
|
-
|
862
|
|||||||||||||
Net Earnings/(Loss)
|
5,970
|
-
|
5,970
|
|||||||||||||
Noncontrolling Interest
|
-
|
-
|
-
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
5,970
|
$
|
-
|
$
|
5,970
|
(a)
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Excludes amortization of acquired intangible assets
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(1) |
Historical Celgene results are for the period from January 1 through November 19, 2019. As the acquisition was completed on November 20, 2019, all Celgene results as of and after this date are included in the historical results of
Bristol-Myers Squibb.
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(2) |
Reclassification of gain on foreign currency cash flow hedges ($74 million) from ‘‘Net product sales’’ to ‘‘Cost of products sold.”
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(3) |
Reclassification of ‘‘Acquisition related charges and restructuring, net’’ ($439 million), ‘‘Interest and investment income, net’’ ($189 million), and ‘‘Interest expense’’ ($1,201 million) to ‘‘Other (income)/expense, net.’’
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(4) |
Reclassification of legal settlements ($84 million) from “Marketing, selling and administrative” to “Other (income)/expense, net.”
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(5) |
Reclassification of certain expenses between “Cost of products sold” ($27 million decrease), “Marketing, selling and administrative” ($87 million decrease), and “Research and development” ($114 million increase).
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Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Cash per share
|
$
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50.00
|
||
Cash consideration for outstanding shares
|
$
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35,745
|
||
Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Exchange ratio
|
1.00
|
|||
Equivalent Bristol-Myers Squibb shares (millions)
|
714.9
|
|||
Closing price of Bristol-Myers Squibb common stock on November 19, 2019
|
$
|
56.48
|
||
Estimated fair value of share consideration
|
$
|
40,378
|
||
Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Exchange ratio
|
1.00
|
|||
Equivalent CVRs (millions)
|
714.9
|
|||
CVR fair value per share
|
$
|
2.30
|
||
Fair value of CVRs
|
$
|
1,644
|
||
Fair value of replacement options (a)
|
$
|
1,428
|
||
Fair value of replacement restricted share awards (a)
|
$
|
987
|
||
Fair value of CVRs issued to option and share award holders (a)
|
$
|
87
|
||
Fair value of share-based compensation awards attributable to pre-combination service
|
$
|
2,502
|
||
Total consideration transferred
|
$
|
80,269
|
(a) |
The fair value of the replacement equity awards issued by Bristol-Myers Squibb was determined as of the closing date of the Celgene merger. The fair value of the awards attributed to pre-combination services of $2,502 million was included in
the consideration transferred and the fair value of the awards attributed to post-combination services will be included in Bristol-Myers Squibb’s post-combination financial statements as compensation costs.
|
|
Notes | ||||
Cash and cash equivalents
|
$
|
11,179
|
|||
Receivables
|
2,652
|
||||
Inventories
|
(a)
|
4,511
|
|||
Property, plant and equipment
|
(b)
|
1,342
|
|||
Intangible assets
|
(c)
|
64,027
|
|||
Otezla assets held-for-sale
|
(d)
|
13,400
|
|||
Other assets
|
3,408
|
||||
Accounts payable
|
(363
|
)
|
|||
Income Taxes Payable
|
(2,718
|
)
|
|||
Deferred income tax liabilities
|
(e)
|
(7,339
|
)
|
||
Debt
|
(f)
|
(21,782
|
)
|
||
Other liabilities
|
(4,017
|
)
|
|||
Goodwill
|
(g)
|
15,969
|
|||
Total consideration transferred
|
$
|
80,269
|
(a) |
A preliminary fair value estimate of $4,511 million has been assigned to inventories acquired, excluding Otezla inventory which is classified as held for sale. The pro forma fair value adjustment to inventories is based on the book value of
Celgene’s inventories as of November 19, 2019, adjusted as follows:
|
|
• |
Finished goods are valued at the estimated selling prices less the sum of the costs of disposal and a reasonable profit margin for the selling effort;
|
|
• |
Work in process is valued at the estimated selling prices upon completion less the sum of costs to complete the manufacturing of the relevant product, costs of disposal and a reasonable profit margin for the completion and selling effort;
and
|
•
|
Raw materials are valued at estimated current replacement costs.
|
(b) |
A preliminary fair value estimate of $1,342 million, has been assigned to property, plant and equipment acquired, primarily consisting of buildings, machinery and equipment, computer equipment and construction in progress.
|
(c) |
A preliminary fair value estimate of $64,027 million has been assigned to identifiable intangible assets acquired, consisting of currently marketed product rights, IPR&D, and capitalized software, excluding the Otezla intangible asset
which is classified as held for sale.
|
Estimated
fair value
|
Weighted
average
estimated
useful life
|
||||||||
Currently marketed product rights
|
$
|
44,470
|
5.1
|
||||||
IPR&D*
|
19,500
|
N/A
|
|||||||
Capitalized software
|
57
|
2.0
|
|||||||
Total
|
$
|
64,027
|
|
* |
Acquired IPR&D assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the
research and development period after the closing date of the combination, these assets will not be amortized into earnings; instead these assets will be subject to periodic impairment testing. Upon successful completion of the development
process for an acquired IPR&D project, determination as to the useful life of the asset will be made; at that point in time, the asset would then be considered a finite-lived intangible asset and Bristol-Myers Squibb would begin to amortize
the asset into earnings.
|
(d) |
The preliminary fair value estimate of the Otezla disposal group, which is classified as held for sale upon close of the Celgene merger and consists primarily of the intangible product right and inventories, is $13,400 million based on the
cash purchase price pursuant to the asset purchase agreement entered into with Amgen.
|
(e) |
Represents the preliminary estimate of deferred income taxes primarily resulting from the fair value adjustments for inventory, identifiable intangible assets, and debt as well as the replacement options and share awards issued. This
estimate was determined based on weighted-average statutory tax rates in effect during the period presented. This estimate of deferred income taxes is preliminary and is subject to change based upon Bristol-Myers Squibb’s final determination of
the fair values of assets acquired and liabilities assumed and the statutory tax rates in the jurisdictions where the assets and liabilities driving taxable income are generated.
|
(f) |
The preliminary fair value estimate of $21,782 million has been assigned to Celgene’s outstanding indebtedness assumed as part of the Celgene merger, derived from closing prices for such indebtedness as of November 19, 2019.
|
(g) |
The preliminary estimate of goodwill arising from the combination is $15,969 million. Goodwill is calculated as the difference between the fair value of the consideration transferred and the fair values assigned to the assets acquired and
liabilities assumed. Goodwill represents the going-concern value associated with future product discovery beyond the existing pipeline and expected value of synergies resulting from cost savings and avoidance not attributed to identifiable
assets. Goodwill is not deductible for tax purposes.
|
(a)
|
Amortization of intangibles
|
|
(i) |
include an estimate of intangible asset amortization of $8,000 million based on the straight-line method and an estimated weighted average useful life of 5.1 years for acquired definite-lived intangible assets for the period January 1, 2019
to November 19, 2019; and
|
|
(ii)
|
eliminate Celgene’s historical intangible asset amortization expense of $405 million for the period January 1, 2019 to November 19, 2019 ($19 million within ‘‘Cost of products sold’’ and $386 million within ‘‘Amortization of acquired
intangible assets.”)
|
(b)
|
Amortization of fair value of debt
|
(c)
|
Elimination of amortization of deferred financing costs
|
(d)
|
Interest income
|
(e)
|
Transaction costs
|
(f)
|
Amortization of inventory step-up
|
(g)
|
Celgene incentive bonus expense
|
(h)
|
GILTI tax
|
(i)
|
Income tax provision
|
(j)
|
Weighted average number of shares and Earnings per share
|
(k)
|
Interest expense
|
(l)
|
Income tax provision
|