{ "docId": "019dd923-622b-71dc-a6d9-fc4318e06f9b", "docSlug": "6ded4b1cfe2c", "documentTitle": "Bristol-Myers Squibb Company (BMY)", "authorId": "03_Starboard_Value", "authorName": "Starboard Value", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2019-03-18 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 5, "pageCount": 197, "prevPage": 4, "nextPage": 6, "slideType": "executive_summary", "function": "frame_problem", "density": "overcrowded", "nDataPoints": 3, "notes": "This is a classic activist 'thesis' slide, setting the stage for the rest of the deck.", "elementsJson": [ "headline_text", "paragraph", "bullet_list", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6d9-fc4318e06f9b/5", "deckHref": "/decks/019dd923-622b-71dc-a6d9-fc4318e06f9b", "deckJsonHref": "/decks/019dd923-622b-71dc-a6d9-fc4318e06f9b.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d9-fc4318e06f9b#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "We believe that the proposed acquisition of Celgene is a bad deal for shareholders and that there is a better path forward for Bristol-Myers.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0936-7173-ab2b-92711a6a0109", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.38, "w": 0.88, "x": 0.08, "y": 0.38 }, "kind": "list", "text": "Bristol-Myers management has decided to bet the future of the Company on their highly questionable view of Celgene’s pipeline, which carries substantial risk.\nBristol-Myers is paying ~$30 billion for the pipeline, approximately twice as much as the Company has implied.\nBristol-Myers’ base case assumptions on the pipeline are aggressive, well-above consensus estimates, and not in-line with Celgene’s historical pipeline success (which produced 3 blockbusters in 15 years vs. Bristol-Myers’ assumption of 10 blockbusters, on average, in 8 years), which adds significant risk for shareholders.\nEven if Bristol-Myers achieves its base case assumptions, the deal will only generate a 3% IRR above WACC. In what we believe are more likely scenarios, this deal will destroy shareholder value.\nThe deal process appears to have been rushed, spurred, we believe, by Bristol-Myers’ desire to announce the acquisition by an arbitrary near-term deadline.\nWe also believe the deal may have been negotiated with the wrong intentions, as a defensive measure designed to protect Bristol-Myers from becoming an acquisition target itself.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "538c57e4-401a-49bd-8c79-133908ab343e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.92, "x": 0.04, "y": 0.26 }, "kind": "list", "text": "We approached this situation, as we do all of our investments, with an open mind and objectively listened to management’s rationale for the transaction.\nAs we will discuss throughout the presentation, we strongly believe that Bristol-Myers’ proposed acquisition of Celgene has the potential to destroy significant shareholder value.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d4df9c8-d891-4612-ba66-a8d39ebaf84d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.92, "x": 0.04, "y": 0.77 }, "kind": "list", "text": "A management team that has struggled to create value on a standalone basis is now asking shareholders to trust them to execute one of the largest pharmaceutical transactions of all time.\nAs we will demonstrate, this transaction will require near-perfect execution for Bristol-Myers shareholders to have a chance to realize any value.\nWe believe that the proposed acquisition of Celgene is a bad deal for shareholders and that there is a better path forward for Bristol-Myers.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7b66ada1-430b-4f47-a987-befb42834336", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.92, "x": 0.04, "y": 0.17 }, "kind": "paragraph", "text": "As we will explain, the proposed acquisition of Celgene Corporation (“Celgene”) by Bristol-Myers Squibb Company (“Bristol-Myers” or the “Company”) adds substantial risk for shareholders, is based on aggressive assumptions around Celgene’s pipeline, and may have been done for defensive purposes.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b1e2ef6a-fc24-48ab-b98c-b1ab9e5d9899", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.6, "x": 0.01, "y": 0.96 }, "kind": "source-note", "text": "Source: Public company filings, Starboard estimates.\nNote: When referring to pharmaceutical products in this presentation, we define “blockbuster” to mean peak revenue generating potential of greater than $1 billion.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "84dba1f4-d504-47b7-b2f2-5a9210a16dde", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 1, "x": 0, "y": 0.91 }, "kind": "title", "text": "Bristol-Myers’ proposed acquisition of Celgene is fraught with risks and may destroy shareholder value", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "50640a6a-c40f-48a6-9aa1-0d72b25b8b33", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.92, "x": 0.04, "y": 0.04 }, "kind": "title", "text": "We Believe the Proposed Acquisition of Celgene Is Ill-Advised and Could Destroy Substantial Value for Bristol-Myers Shareholders", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f801ea34-1595-4afa-80cf-8118e6792881", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }