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July 23, 2009 5:41 PM

Bristol-Myers Buys Biotech Firm for $2.4 Billion

Posted by Matt Straquadine

Bristol-Myers Squibb announced Wednesday that it’s buying Medarex for $2.4 billion, continuing the trend of cash-rich drug companies acquiring biotech firms that have promising treatments in development.

The all-cash purchase price equals $16 per share of Medarex stock, a 90 percent premium over Wednesday’s closing price of $8.40. But with $8.1 billion in cash reserves according to its latest earnings report, Bristol-Myers should have no problem covering the tab. The boards of both companies unanimously approved the deal earlier this week.

Medarex, based in Princeton, N.J., has developed a number of antibody-based drugs, including Ipilimumab, a melanoma treatment in its final stage of FDA approval. For the past four years, Bristol-Myers and Medarex have collaborated on the development of Ipilimumab, as well as an ongoing study of the drug's effectiveness in treating lung cancer.

Covington & Burling corporate partners Scott Smith, John Hurvitz and Stephen Infante advised Medarex on the deal, along with associates Donald Saelinger, Russell Valdez and Richard Kruger.  Smith declined a request for comment.

Cravath, Swaine & Moore partners Susan Webster and Thomas Dunn, and associates Sarah Jones, Leigh Harlan and Jean-Paul Sevilla advised Bristol-Myers.  A firm spokesperson referred questions to Bristol-Myers, which didn't immediately return calls seeking comment. 

Bristol-Myers has used Cravath for transactional work in the past. In February the firm represented Bristol-Myers in its spinoff of baby formula maker Mead Johnson, a deal that won partner Ronald Cami a spot in Am Law Daily’s Dealmaker of the Week.  Cravath also advised Bristol-Myers on its acquisition of ImClone last summer.

Skadden, Arps, Slate, Meagher & Flom partner Stephen Arcano in New York is representing Goldman Sachs as financial adviser to Medarex in connection with the deal.

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