We’ve got a Merger Monday spotlight on Bristol-Myers Squibb  (BMY) – Get Report after the company agreed to buy MyoKardia  (MYOK) – Get Report in a $13.1 billion deal.

The deal is sending shares of MyoKardia up about 58% on the day. The rally leaves shares near $220, just shy of the $225 takeout price.

The all-cash deal is expected to close in the fourth quarter of 2020 and will help Bristol-Myers strengthen its cardiovascular portfolio.

However, Bristol-Myers’ reaction has been somewhat neutral, with the stock up just 0.4% on the day. While the acquisition will strengthen its cardiovascular offerings, it’s not expected to be accretive until 2023.

That’s likely giving investors some pause with the stock, even if it’s good news over the long term. Let’s look at the chart to see what levels matter now.

Bristol-Myers Squibb is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells BMY? Learn more now.

Trading Bristol-Myers

Daily chart of Bristol-Myers Squibb stock.

Daily chart of Bristol-Myers stock.

Bristol-Myers has not had an easy run in 2020. After closing on its deal to buy Celgene in late 2019, shares were in the midst of a strong momentum period. The stock ran from a low near $40 in July to $62 around the end of the year.

In the first quarter of 2020, Bristol-Myers was flirting with and quietly succeeding with a breakout over $64. Then the coronavirus hit. 

After a violent decline in March followed by a strong rebound, shares have settled down into an admittedly wide range. Now, we need to see some follow-through before we can trade this name on the long side.

Specifically, there’s a lot of overhead with this name. The 10-week, 20-week and



text: Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured at the headquarters in Le Passage Reuters


© Reuters
Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured at the headquarters in Le Passage Reuters

  • Bristol-Myers Squibb said on Monday that it agreed to acquire MyoKardia for $13.1 billion in cash.
  • The deal will bolster Bristol-Myers’ cardiovascular franchise, as the acquisition gives the biotech company exposure to promising pipeline candidates for the treatment of hypertrophic cardiomyopathy, among others.
  • The deal is expected to close in the fourth quarter of 2020 and is expected to be accretive to non-GAAP earnings beginning in 2023, according to Bristol-Myers.
  • MyoKardia soared 59% in Monday trades.
  • Visit Business Insider’s homepage for more stories.

MyoKardia, a clinical-stage biotechnology company based in Brisbane, California, soared 59% on Monday after it was announced that Bristol-Myers Squibb had agreed to acquire the company for $13.1 billion in cash.

Loading...

Load Error

MyoKardia has developed a pipeline of potential therapies to combat cardiovascular diseases, and announced in May that its experimental drug for obstructive hypertrophic cardiomyopathy, mavacamten, met all of its phase 3 primary and secondary endpoints. 

The deal has been approved by the boards of both companies and is expected to close in the fourth quarter of 2020. Bristol-Myers will fund the deal with a combination of cash and debt. 

Read More: MORGAN STANLEY: Buy these 16 stocks to cheaply invest in next-generation technologies and reap the future profits they generate.

Bristol-Myers said the acquisition would be accretive to its non-GAAP earnings in the beginning of 2023, as the company ramps up the commercialization of mavacamten. The company reaffirmed its 2021 non-GAAP earnings-per-share guidance.

Mavacamten is expected to be submitted to the FDA for approval in the first quarter of 2021. 

“The acquisition of MyoKardia further strengthens our portfolio, pipeline and scientific capabilities, and is expected to add a meaningful medium- and long-term growth driver,” Giovanni

Britsol-Myers Squibb Co.  (BMY) – Get Report agreed to buy drugmaker MyoKardia Inc.  (MYOK) – Get Report, which makes the experimental heart treatment mavacamten, for around $13.1 billion.

Bristol-Myers will pay $225 per share, for the Brisbane, California-based MyoKardia, a 62% premium to its Friday closing price of $139.60 each. Bristol-Myers said the deal will begin adding to its overall bottom line in 2023, and plans to finance the acquisition with a combination of cash and debt.

Britsol-Myers also reiterated its existing profit guidance for the 2021 fiscal year, which sees non-GAAP earnings in the range of $7.15 to $7.45 per share. The group boosted in 2020 forecast in August to a range of $6.10 to $6.25 per share.

MyoKardia recently completed a Phase 2 study of its mavacamten drug, which targets patients with hypertrophic cardiomyopathy, a progressive heart disease that increases the risk of strokes, heart failures and sudden cardiac death.

“The acquisition of MyoKardia further strengthens our portfolio, pipeline and scientific capabilities, and is expected to add a meaningful medium- and long-term growth driver,” said CEO Giovanni Caforio. “We are further strengthening our outstanding cardiovascular franchise through the addition of mavacamten, a promising medicine with the potential to address a significant unmet medical need in patients with cardiovascular disease.”

“Our companies share a commitment to innovation and bold science, and our respective strengths will help us realize the value inherent in this portfolio,” he added. “We have long admired MyoKardia and what they have done to revolutionize cardiovascular treatments through a precision medicine approach. We look forward to welcoming their talented team to our company.”  

Bristol-Myers shares were marked 0.5% lower from their Friday close to indicate an opening bell price of $58.40 each, while MyoKardia shares surged 59.4% to indicate an opening