>> The announcement from Bristol-Myers Squibb the maker of drugs like Plavix and Opdivo>> It works with your immune system.>> That it's buying drug makers Celgene for roughly $74 billion, shaking up the pharmaceutical industry Thursday. The deal which would create one of the biggest drug companies in the world comes at a challenging time for both companies.
Caroline Humer is covering the deal.>> 2018 was a tough year for Bristol, it fell behind in its sort of key cancer franchise. And for Celgene as well, they've had some missteps over the last couple of years in some key developmental drugs. So for the two companies, they're gonna combine their cancer franchises.
It brings Celgene has Revlimid, Bristol has YERVOY Opdivo. And with uncertainty about YERVOY and Opdivo, Revlimid is a good year term asset. Because we are still waiting for Bristol's drugs in immunotherapy to really catch up to their biggest rival at Merck, it's Keytruda franchise.>> Keytruda from Merck.
>> And this year we're expecting some important data on two different clinical trials. And now today some analysts are saying that perhaps that data's not going to be very good. And that's actually why the deal had to happen, and that's why the stock sold off today.>> Shares of Bristol fell as much as 15% on the news, while Celgene jumped as much as 30%, lifting shares of other pharmaceutical companies, too.
>> These Big Pharma deals tend to come in clusters. We haven't had a big one in awhile, and so today analysts are saying that they think this could be the beginning of a new sort of consolidation among Big Pharma companies. And shares of companies that are potential targets, like Gilead, Biogen, Regeneron, these shares all rose today in trading.
>> Bristol and Celgene said the deal would create $2.5 billion in cost savings by 2022. Meaning job cuts are in store.>> They're gonna cut back on R&D. They'll cut back on sales, general administrative expenses. And they even said that some of those savings will come from manufacturing.
>> Bristol says that will add more than 40% to its earnings in the first year after the deal closes, which is expected to happen in the third quarter of 2019.