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United States / Analyst Insights
The Industry Effects of the Bristol-Myers Squibb – Celgene Deal

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by Robert Miles, Senior Strategic Market Research Analyst
Jan 03 2019

Bristol-Myers Squibb (BMY) has announced plans to acquire Celgene Corp. for nearly $75.0 billion. The combined biopharmaceuticals company will have nine product lines that generate at least $1.0 billion in annual sales. Despite the overall size of the deal, the effect on US industries is muted by how North American Industry Classification System (NAICS) industries are defined. BMY is designated as a major player in the Brand Name Pharmaceutical Manufacturing industry (IBISWorld report 32541a), holding a market share of 6.8% of the $171.7-billion industry in 2018, according to IBISWorld estimates. Though Celgene’s product portfolio consisted of $8.3 billion in US sales in 2017, most of the product manufacturing occurs in Switzerland. Company reporting states that of Celgene’s products, only Abraxane is produced in bulk in its Arizona-based facility. Worldwide sales of Abraxane are only around $1.0 billion. Various factors are expected to magnify BMY’s production in the coming years, including efficiencies in production, as well as protection from generic drug makers by adding to the patent pipeline. The acquisition deal with BMY and Celgene is expected to materially increase BMY’s US manufacturing footprint; however, the scale will be limited by industry definitions.

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