The acquisition of Medarex
At a whopping 90% premium to the previous close, the $2.1 billion price tag, net of cash, may seem a little high for half of a drug, but Bristol-Myers is getting more than Medarex's phase 3 drug candidate. The latter also has antibody technology that includes royalties on drugs from Johnson & Johnson
The good news for Bristol-Myers' investors continued as the company released solid earnings for the second quarter. Revenue was up just 3%, but cost-cutting measures allowed earnings per share to come in 36% higher.
Most importantly, the company increased its net cash position by another $300 million. The cash cow that Bristol-Myers has become makes it easy for the company to fund future acquisitions, but it also makes it a tempting takeover target.
Only time will tell which one prevails.
Take on some additional Foolishness:
- Now's the time to double down on dividends.
- Bristol Myers is one stock that just makes sense.
- The next 3 dividend dynamos.