Bristol-Myers Squibb Co.’s $74 billion planned purchase of Celgene Corp. puts it in line to lead the drug industry’s hottest market, cancer, as early as next year. The combined company will probably overtake frontrunner Roche Holding Co. in 2020 with about $29 million in oncology sales, according to Bloomberg Intelligence. Analysts expect Roche’s cancer sales to slip to about $25 billion by then, based on estimates compiled by Bloomberg Intelligence.
Roche has dominated the cancer market for more than 15 years, thanks to a trio of medicines that account for more than a third of its sales. Those products now face competition, both from cheaper copies and newer drugs. Generic competition is a little farther away for Celgene’s best-selling cancer therapy, Revlimid. Analysts expect the drug’s sales won’t crest until the early 2020s.
Who wins in the cancer market in the years to come will depend on their pipeline of experimental medicines, not aging blockbusters. Roche has diversified outside of oncology, and its top new treatment is for multiple sclerosis. Bristol-Myers emphasized Celgene’s innovative new medicines, including the experimental cell-therapy program acquired in the $9 billion Juno Therapeutics takeover last year.
Bristol-Myers is facing fierce competitors, including Merck & Co., a leader in immuno-oncology with its Keytruda treatment. Investors will be looking for direction from the company about its growth prospects for the future, said Tim Anderson, a New York-based analyst for Wolfe Research.
“While the near-term for the combined company will invariably look good, the longer-term outlook will remain less certain," Anderson wrote in a note to investors.