Biotech Values

[DewDiligence]

Re: CELG-JUNO deal arithmetic

Nominally, CELG is buying $850M of JUNO stock, and the other $150M of the $1B total is an up-front license fee. However, because the equity portion of the deal comes from newly issued shares, the share price CELG is paying is essentially arbitrary.

For instance, if CELG had bought 9.14M shares of JUNO shares at a nominal price of $54.70/sh (instead of 9.14M shares @$93/sh) and paid an up-front license fee of $500M (instead of $150M), the deal terms would have been identical for all practical purposes.