There’s plenty of drug-industry zeitgeist crammed into the news that Bristol-Myers Squibb is paying $2.1 billion to buy Medarex. On one side of the equation is Bristol, an old-line pharma company sitting on a lot of cash ($8.1 billion as of the end of the second quarter, according to Bristol’s latest earnings report this morning) and facing the generic competition for its blockbuster Plavix in a couple of years. On the other side is Medarex, a company with two of the most desirable traits in the business: a promising cancer medicine in late-stage testing, and the know-how to develop biotech drugs. Everybody thinks biotech is the wave of

the future; cancer drugs command high prices and are seen to meet unmet medical needs, which helps a lot in winning FDA approval. In typical fashion, Bristol and Medarex were already partnered on ipilimumab, a drug in Phase III trials for melanoma. It’s common for biotech companies to team up with big drug makers to bring experimental drugs into late-stage trials, which are often expensive and complicated to orchestrate. Bristol is paying a 90% premium to Medarex’s Wednesday closing price, the WSJ notes . Medarex agreed not to seek other bidders.

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The Way Pharma Lives Now: Bristol’s $2.1 Billion Medarex Deal