Company Shakeups
BMS Sheds ConvaTec for $4.1 billion
A few hours after I had written this post about the Pfizer/Esperion spin-off signaling a changing of the times in big pharma, I see I this story about Bristol-Myers Squibb divesting ConvaTec to some private equity groups (Nordic Capital VII and Avista Capital Partners) for $4.1 billion dollars. This press release jogged my memory and I remembered reading about BMS divesting its medical imaging division for 500 something million, also to Avista sometime in late December. While neither deal is applicable to my “entering a new R&D phase” projection I put forth in the aforementioned post, the move does still signify the big players’ willingness to concentrate on what they do best.
Now, I don’t follow non-biopharma industries real closely so you can correct me if I’m wrong, but doesn’t this seem to be the anti-GE strategy (i.e.; divesting non-synergistic business units)? I’m not sure what this means. Maybe pharma is choosing potential growth rate over mitigating risk by diversification for a potential larger return? Or, contrary to my thesis, big pharma may just be trading a failed (or stagnant) asset for one with a brighter future by buying the next hot commodity. With licensing deals for in-demand, phase 2 compounds increasingly in the 100-200m upfront, $1b biodollar every dime helps (even if you have 11 figures of cash in the bank.
Theoretically Related Posts
Tags: Discussion
One comment for “BMS Sheds ConvaTec for $4.1 billion”
Post a comment
[...] a previous post, I speculated on reasons for shedding of non-core pharmaceutical assets by BMS. Don’t read [...]