Bristol-Myers Squibb (BMY) announces a bolt-on deal in order to revive its business. The purchase of IFM adds to the oncology pipeline of the company and seems well structured, as the interests of both parties are aligned and risks are shares.
I like such deals, as Bristol-Myers could use some diversification in its pipeline away from Opdivo-based varieties. It is true that the company has recently seen some growth again; however, after a decade long period of sales stagnation, its growth driver, Opdivo, is facing more intense competition. For that reason, and the fact that the pipeline is not very diverse, I see no immediate appeal at market-equivalent earnings multiples, even though the balance sheet is strong.
