In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from re­veal­ing its check­point in­hibitor Op­di­vo blew a big liv­er can­cer study on Mon­day, Bris­tol-My­ers Squibb said its plans to swal­low Cel­gene will re­quire the sale of block­buster pso­ri­a­sis treat­ment Ote­zla to keep the Fed­er­al Trade Com­mis­sion (FTC) at bay.

The an­nounce­ment — which has po­ten­tial­ly de­layed the com­ple­tion of the takeover to ear­ly 2020 — irked in­vestors, trig­ger­ing the New York-based drug­mak­er’s shares to tum­ble Mon­day morn­ing in pre­mar­ket trad­ing.

Cel­gene’s Ote­zla, ap­proved in 2014 for pso­ri­a­sis and pso­ri­at­ic arthri­tis, is a ris­ing star. It gen­er­at­ed glob­al sales of $1.6 bil­lion last year, up from the near­ly $1.3 bil­lion in 2017. Apart from the par­tial over­lap of Bris­tol-My­ers in­jectable Oren­cia, the com­pa­ny’s ri­val oral TYK2 pso­ri­a­sis drug is in late-stage de­vel­op­ment, af­ter the firm post­ed en­cour­ag­ing mid-stage da­ta on the drug, BMS-986165, last fall. With Mon­day’s de­ci­sion, it ap­pears Bris­tol-My­ers is fa­vor­ing its ex­per­i­men­tal drug, and dis­count­ing Ote­zla’s fu­ture.

The move blind­sided some an­a­lysts. Cred­it Su­isse’s Vamil Di­van not­ed just days ago:

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