Drugmaker Bristol-Myers Squibb Co.s offer to pay $4.5 billion to acquire biopharmaceutical company ImClone Systems substantially undervalues the company, according to an ImClone news release.
The statement came after an offer by Bristol-Myers late last week to pay $60 per share to purchase all outstanding shares of ImClone, in which Bristol-Myers currently holds a 17% interest. But ImClones board of directors said that while they will review the offer, it is most likely too low to satisfy its shareholders in light of preliminary plans to spin off the companys drug pipeline business.
Based on preliminary internal data, and recognizing that the pipeline products are in various stages of development, the board still believes that the companys pipeline business may be extremely valuable and significantly increase stockholder value as a separate business, wrote company officials in the news release.
The two drugmakers currently have a co-development partnership in the cancer-therapy drug Erbitux, which is used in the treatment of metastatic-colorectal and squamous-cell head and neck cancers. ImClone Chairman Carl Icahn expressed concern that that relationship may have inadvertently given Bristol-Myers access to confidential information concerning ImClone and its pipeline, which includes a pipeline cancer drug that would compete with Erbitux. Bristol-Myers has no marketing rights to that drug. -- by Shawn Rhea