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Investors take their time to buy the huge pharmaceutical behemoth born from the merger of
Bristol-Myers Squibb
(ticker: BMY) and
Celgene
(CELG) Swiss credit analyst Vamil Divan wrote Tuesday, after long conversations with investors.
Divan wrote that investors see a benefit in combination, but still have too many questions.
"The general theme was that even if the name has a value, there is no hurry to get into the stock before the next data reads and the end of Celgene's acquisition "said Divan.
At the same time, Bristol-Myers is doing its best to build confidence in its future after the acquisition. On Wednesday, the company announced some of the executives who would run the company after the closing of the Celgene acquisition. The scientific leader of the company will leave in October, among other changes, reported the Wall Street Journal.
The story back. In April, Bristol-Myers Squibb shareholders approved the proposed $ 74 billion Celgene acquisition. The transaction is expected to close in the third quarter. Bristol-Myers Squibb shares are down 10.3% since the beginning of the year.
According to Barron, Divan said it remains concerned about the company's ability to "integrate the transaction effectively without suffering any commercial or development disruption".
What's up. In his note this week, Divan wrote that he had had conversations with investors who he said took a wait-and-see approach to society.
He said investors had "limited enthusiasm" for Celgene's major drug portfolio offerings. He added that, even if investors think that management will be sure to beat and raise successive quarterly estimates, it is not clear that this will lead to an increase in the price of the stock.
Many investors, said Divan, "say that even if the action seems cheap … there are still good reasons for the stock to trade at this level of reduction for the group at the moment ".
Looking forward to. Bristol-Myers is starting to set the stage for its merged future with the announcement Wednesday of part of its new management team. Rupert Vessey, currently president of research and early development at Celgene, will assume this role within the merged company. Samit Hirawat, a Novartis executive, will be the company's medical director for global drug development.
Bristol-Myers shares rose 0.1% to $ 46.69 at 11:42 am on Wednesday.
S & P 500
rose 0.4% and the Dow Jones Industrial Average rose 0.5%.
Write to Josh Nathan-Kazis at [email protected]
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