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Changed Risks for BRISTOL MYERS SQUIBB CO (BMY)

Here are risks that changed year over year. risks from the recent filings of BRISTOL MYERS SQUIBB CO. Our algorithms work hard to highlight risks unique to this company.
We or regulatory authorities may need to change the labeling for any pharmaceutical product, including after a product has been marketed for several years These changes are often the result of additional data from post-marketing studies, head-to-head studies, adverse events reports, studies that identify biomarkers (objective characteristics that can indicate a particular response to a product or therapy) or other studies or post-marketing experience that produce important additional information about a product New information added to a product’s label can affect its risk-benefit profile, leading to potential recalls, withdrawals or declining revenue, as well as product liability claims Sometimes additional information from these studies identifies a portion of the patient population that may be non-responsive to a medicine or would be at higher risk of adverse reactions and labeling changes based on such studies may limit the patient population The studies providing such additional information may be sponsored by us, but they could also be sponsored by competitors, insurance companies, government institutions, MCOs, scientists, investigators or other interested parties While additional safety and efficacy information from such studies assist us and healthcare providers in identifying the best patient population for each product, it can also negatively impact our revenues due to inventory returns and a more limited patient population going forward Additionally, certain study results, especially from head-to-head studies, could affect a product’s formulary listing, which could also adversely affect revenues
Third parties may claim that we infringe upon their intellectual property Resolving an intellectual property infringement claim can be costly and time consuming and may require us to enter into license agreements, which may not be available on commercially reasonable terms A successful claim of patent or other intellectual property infringement could subject us to significant damages or an injunction preventing the manufacture, sale, or use of the affected product or products Any of these events could have a material adverse effect on our profitability and financial condition In addition, if the proposed Celgene acquisition is consummated, we will also be subject to certain intellectual property claims of Celgene
that seek to amend pharmaceutical pricing and rebate reimbursement practices such as using international pricing indexes, modifying the federal Anti-Kickback statute discount safe harbor, accelerating generic drug approval processes, promoting the use of biosimilar drugs and the option of applying step therapy, listing prices of products in advertising and granting additional authority to governmental agencies to manage drug utilization and negotiate drug prices and laws at the state level that have recently been enacted in California, Vermont, Nevada and New York that are focused on drug pricing transparency and/or limiting state spending on drugs; (iii) the potential impact of changes to pharmaceutical reimbursement, changes resulting from our implementation of the guidance in the final rule issued by the Centers for Medicare & Medicaid Services (“CMS”) on the calculation of Average Manufacturer Price and Best Price and changes that are required based on the guidance from the CMS from the rule that was deferred; (iv) the impact of the increased pricing pressure from Medicare Part D formularies, Medicare Part B reimbursement rates to physicians, expanded utilization under the 340B Drug Pricing Program, as well as commercial formularies in general; (v) reimbursement delays; (vi) government price erosion mechanisms across Europe and in other countries, resulting in deflation for pharmaceutical product pricing; (vii) collection delays or failures to pay in government-funded public hospitals outside the US; (viii) the impact on pricing from parallel trade and drug importation across borders; (ix) other developments in technology and/or industry practices that could impact the reimbursement policies and practices of third-party payers; and (x) inhibited market access due to real or perceived differences in value propositions for our products compared to competing products
Form 10-K or that we assume when we provide our financial guidance In addition, some countries, such as India, are allowing competitors to manufacture and sell competing generic products, which negatively impacts the protections afforded the Company Lower-priced biosimilars for BMS biologic products or competing biologics could negatively impact our volumes and prices
Adverse changes in US and global economic and political conditions could adversely affect our profitability
If we consummate our acquisition of Celgene, we will assume Celgene’s risks arising from legal proceedings Like many pharmaceutical companies in the current legal environment, Celgene is involved in various patent, product liability, consumer, commercial, securities, environmental and tax litigations and claims, government investigations and other legal proceedings that arise from time to time in the ordinary course of its business We cannot predict with certainty the eventual outcome of Celgene’s pending or future legal proceedings and an adverse outcome in any of these matters could be material to our business, cash flow, financial condition or results of operations
Risks Related to Our Business
Failure to complete our pending acquisition of Celgene could negatively impact our stock price and our future business and financial results
Increased pricing pressure and other restrictions in the US and abroad from MCOs, institutional purchasers and government agencies and programs, among others, could negatively affect our revenues and profit margins
We are subject to income taxes in the US and various other countries globally In particular, although the passage of the Tax Cuts and Jobs Act of 2017 reduced the US tax rate to 21%, our future earnings could be negatively impacted by changes in tax legislation including changing tax rates and tax base such as limiting, phasing-out or eliminating deductions or tax credits, taxing certain excess income from intellectual property, changing rules for earnings repatriations and changing other tax laws in the US or other countries
The failure of third parties to meet their contractual, regulatory and other obligations could adversely affect our business
If any of these risks materialize, they may materially and adversely affect our businesses, financial condition, financial results, ratings, stock prices and/or bond prices
We have acquired, or in-licensed, a number of other assets and we expect to continue to support our pipeline with compounds or products obtained through licensing and acquisitions Future revenues, profits and cash flows of an acquired company’s products, technologies and pipeline candidates, may not materialize due to low product uptake, delayed or missed pipeline opportunities, the inability to capture expected synergies, increased competition, safety concerns, regulatory issues, supply chain problems or other factors beyond our control Substantial difficulties, costs and delays could result from integrating our acquisitions, including for (i) R&D, manufacturing, distribution, sales, marketing, promotion and information technology activities; (ii) policies, procedures, processes, controls and compliance; and (iii) tax considerations In addition, due to the substantial amount of debt that we expect to incur to finance the cash portion of the proposed Celgene acquisition consideration, there can be no assurance that, if the acquisition is consummated, we will choose to continue to invest in these technologies
We are focusing our efforts and resources in disease areas of high unmet need With our more focused portfolio, investors are placing heightened scrutiny on some of our products or late-stage compounds In particular, Opdivo is the backbone of our IO portfolio During 2018, we announced multiple regulatory milestones for Opdivo that resulted in label expansions for new indications We have, however, also experienced setbacks and may continue to do so as there are further developments in our clinical studies In 2019, we expect to receive further data from ongoing clinical studies, including further information from CheckMate-227, a combination study in the first-line lung cancer setting and decisions from health authorities regarding potential label expansions
We will incur significant additional indebtedness to finance our pending acquisition of Celgene as well as transaction and acquisition-related costs in connection with the acquisition, which will limit our operating flexibility
Compounds or products may appear promising in development but fail to reach market within the expected or optimal timeframe, or at all In addition, product extensions or additional indications may not be approved Furthermore, products or indications approved under the US FDA's Accelerated Approval Program may be contingent upon verification and description of clinical benefit in confirmatory studies and such studies may not be successful For example, in November 2018, we announced that the CheckMate-451 study did not meet its primary endpoint of overall survival with Opdivo+Yervoy versus placebo as a maintenance therapy in patients with extensive-stage SCLC after completion of first-line platinum-based chemotherapy
Our obligations and the obligations of Celgene to complete the merger are subject to satisfaction or waiver of a number of conditions There can be no assurance that the conditions to completion of the acquisition will be satisfied or waived or that the acquisition will be completed If the acquisition is not consummated for any reason, we may receive negative reactions from our shareholders, providers, vendors, regulators and employees and we may be subjected to various material risks, including the possibility that the price of our common stock and other securities may decline to the extent that current market prices reflect a market assumption that the acquisition will be completed
We expect to incur a number of non-recurring costs in connection with the acquisition, whether or not the acquisition is completed, which will be mostly comprised of transaction costs, facilities and systems consolidation costs and employment-related costs Although we expect that the realization of efficiencies related to the integration of the businesses will offset at least a portion of these costs, this net benefit may not be accomplished in the near term or at all
We are currently subject to a number of government laws and regulations and in the future, could become subject to new government laws and regulations The costs of compliance with such laws and regulations, or the negative results of non-compliance, could adversely affect our business, our operating results and the financial condition of our Company; these include (i) additional healthcare reform initiatives in the US or in other countries, including additional mandatory discounts or fees; (ii) new laws, regulations and judicial or other governmental decisions affecting pricing, drug reimbursement, receivable payments and access or marketing within or across jurisdictions; (iii) changes in intellectual property law; (iv) changes in accounting standards; (v) new and increasing data privacy regulations and enforcement, particularly in the EU and the US; (vi) emerging and new global regulatory requirements for reporting payments and other value transfers to healthcare professionals; and (vii) the potential impact of importation restrictions, legislative and/or other regulatory changes
Any businesses or assets that we acquire in the future may underperform, we may not be able to successfully integrate them into our existing business and the occurrence of a number of unexpected factors could prevent or substantially delay the consummation of an anticipated acquisition, divestiture or merger
We derive a majority of our revenue and earnings from several key products Our six prioritized brands comprised approximately 86% of revenues in 2018 Growth products such as Opdivo and Eliquis represented, and are expected to increasingly represent, a significant part of our revenue, earnings and cash flows A reduction in revenue from any of these products could adversely impact our earnings and cash flows Also, if one of our major products were to become subject to issues such as loss of patent protection, significant changes in demand, formulary access changes, material product liability, unexpected side effects, regulatory proceedings, negative publicity, supply disruption from our manufacturing operations or third-party supplier or a significant advancement of competing products, we may incur an adverse impact on our business, financial condition, results of operations or trading price of our stock
2018
We face intense competition from other manufacturers
Also, in the event of a termination of the merger agreement under certain specified circumstances, we could be required to reimburse expenses of Celgene or pay Celgene a termination fee of up to $22 billion and we could be subject to litigation related to any failure to complete the merger or to specifically enforce our obligation to perform our obligations under the merger agreement In addition, the merger agreement places certain restrictions on the conduct of our businesses prior to completion of the merger, and such restrictions, the waiver of which is subject to consent of Celgene, may prevent us from making certain acquisitions, taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the merger that we would have made, taken or pursued if these restrictions were not in place
Additionally, Celgene’s officers and employees may hold shares of Celgene common stock, and, if the merger is completed, these officers and employees may be entitled to cash and/or the merger consideration in respect of such shares of Celgene common stock Officers and employees may hold Celgene Stock Options, Celgene RSUs, Celgene PSUs and Celgene RSAs that are subject to accelerated vesting upon a termination without cause and/or a resignation for “good reason” following completion of the merger Pursuant to employment agreements and/or other agreements or arrangements with Celgene, certain key employees of Celgene are also entitled to receive severance payments upon a termination without cause and/or a resignation for “good reason” following completion of the merger Under these agreements, certain key employees of Celgene potentially could resign from his or her employment following specified circumstances set forth in his or her applicable agreement, including an adverse change in his or her title, authority or responsibilities, compensation and benefits or primary office location These payments, individually or in the aggregate, could make retention of Celgene officers and employees more difficult
Upon completion of the acquisition, we will increase our indebtedness, which will include acquisition debt financing of approximately $335 billion and the assumption of approximately $199 billion of Celgene’s debt, resulting in us having a higher debt-to-equity ratio In addition, Celgene shareholders will also receive one tradeable contingent value right for each share of Celgene representing the right to receive $900 in cash upon the achievement of future regulatory milestones As a result of the acquisition and increased indebtedness, we anticipate that our corporate credit ratings will be decreased by one or more ratings agencies The increased indebtedness and any payments pursuant to the contingent value right will significantly reduce the amount of cash flow available to fund our efforts to combine our business with Celgene and realize expected benefits of the pending acquisition, to pursue other acquisitions, and to engage in investments in product development, capital expenditures, dividend payments, share repurchases and other activities, which could, among other things, limit our flexibility in planning for, or reacting to, changes in or challenges relating to our business and industry and, together with any decrease in our credit ratings, increase our borrowing costs In addition, under certain circumstances, we could be required to repurchase Celgene’s outstanding debt securities, and we cannot provide assurances that we would have sufficient funds to do so
Current or future lawsuits, claims, proceedings and government investigations could preclude or delay the commercialization of our products or could adversely affect our operations, profitability, liquidity or financial condition, after any possible insurance recoveries, where available Such legal matters include (i) intellectual property disputes; (ii) adverse decisions in litigation, including product liability and commercial cases; (iii) anti-bribery regulations, such as the US Foreign Corrupt Practice Act or UK Bribery Act, including compliance with ongoing reporting obligations to the government resulting from any settlements; (iv) recalls or withdrawals of pharmaceutical products or forced closings of manufacturing plants; (v) the failure to fulfill obligations under supply contracts with the government and other customers; (vi) product pricing and promotional matters; (vii) lawsuits and claims asserting, or investigations into, violations of securities, antitrust, Federal and state pricing, consumer protection, data privacy and other laws; (viii) environmental, health, safety and sustainability matters; and (ix) tax liabilities resulting from assessments from tax authorities
In addition, any discontinuation or modification of the LIBOR and any future initiatives to regulate, reform or change the manner of administration of benchmarks could result in adverse consequences to the return on, value of and market for our securities and other instruments whose returns are linked to any such benchmark Additionally, future pension plan funding requirements continue to be sensitive to global economic conditions and the related impact on equity markets Also, disruptions in the credit markets or a downgrade of our current credit rating could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, which could adversely affect our liquidity and capital resources or significantly increase our cost of capital Finally, our business, operations may be adversely affected by political volatility, conflicts or crises in individual countries or regions, including terrorist activities or war
American Patient First Blueprint
of our revenues outside of the US in 2018 As such, our revenues, earnings and cash flow are exposed to risk from a strengthening US dollar We have exposure to customer credit risks in Europe, South America and other markets including from government-guaranteed hospital receivables in markets where payments are not received on time We have significant operations in Europe, including for manufacturing and distribution The results of our operations could be negatively impacted by any member country exiting the eurozone monetary union or EU, including the planned exit of the UK from the EU, in particular an exit without a withdrawal agreement and associated transition period in place, may have an impact on our research, commercial and general business operations in the UK and the EU, including the approval and supply of our products
If the proposed acquisition is consummated, we will issue to Celgene shareholders shares of our common stock As a result of the issuance of these shares of our common stock, our shareholders will own a smaller percentage of the combined company after the acquisition and will therefore have a reduced voting interest after the acquisition Based on preliminary estimates which may materially change after the completion of the merger, the proposed acquisition is expected to be dilutive to our 2019 GAAP EPS, principally due to the amortization of intangible assets associated with Celgene’s currently marketed product rights as well as additional interest, acquisition and integration costs Although we expect the transaction to be accretive to our 2019 non-GAAP EPS, unexpected factors may result in lower or delayed accretion or even in dilution to our EPS in 2019 or in future years
We rely extensively on IT systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted provided and/or used for third-parties or their vendors, to assist in conducting our business A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized access to our systems or unauthorized persons could negatively impact operations The ever-increasing use and evolution of technology, including cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our, or our third-party providers', systems, portable media or storage devices We could also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers Although the aggregate impact on our operations and financial condition has not been material to date, we have been the target of events of this nature and expect them to continue as cybersecurity threats have been rapidly evolving in sophistication and becoming more prevalent in the industry We have invested in industry appropriate protections and monitoring practices of our data and IT to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats While we maintain cyber insurance, this insurance may not, however, be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems There can be no assurance that our continuing efforts will prevent breakdowns or breaches to our or our third-party providers’ databases or systems that could adversely affect our business
The combined company will be subject to the risks that Celgene faces, in addition to the risks faced by Bristol-Myers Squibb
Our strategy is focused on delivering innovative, transformational medicines to patients in a focused set of disease areas If we are unable to successfully execute on this strategy, this could negatively impact our future results of operations and market capitalization In connection with this strategy, we are in the process of acquiring Celgene, a leading innovative biotech company that complements our existing portfolio of medicines and pipeline assets across our key disease areas of focus Our ability to successfully complete the acquisition and successfully integrate Celgene could impact our results of operations If we are not able to achieve the cost savings that we expect, this could negatively impact our operating margin and earnings results In addition, we may be unable to consistently maintain an adequate pipeline, through internal R&D programs or transactions with third parties, to support future revenue growth Competition among pharmaceutical companies for acquisition and product licensing opportunities is intense, and we may not be able to locate suitable acquisition targets or licensing partners at reasonable prices, or successfully execute such transactions If we are unable to support and grow our marketed products, successfully execute the launches of newly approved products, advance our late-stage pipeline, manage change from our operating model evolution and manage our costs effectively, our operating results and financial condition could be negatively impacted
We have entered into several arrangements which entitle us to potential royalties from third parties for out-licensed intellectual property, commercialization rights and sales-based contingent proceeds related to the divestiture of businesses In many of these arrangements we have minimal, if any, continuing involvement that contribute to the financial success of those activities Royalties have continued to represent a significant percentage of our pretax income, including royalties related to the divestiture of Plavix* and Avapro*/Avalide*, our Erbitux* and diabetes businesses (including the transfer of certain future royalty rights pertaining to Amylin, Onglyza* and Farxiga* product sales), our Sanofi arrangement,
Celgene has several commercialized products as well as a diverse early- and late-stage pipeline that includes five potential near-term product launches If we consummate our acquisition of Celgene, the combined company may be negatively affected if the expiration or loss of patent protection for any of these commercialized products occurs, or upon the “at-risk” launch by a manufacturer of a generic version of any of these products In addition, if the combined company fails to obtain timely, or at all, requisite regulatory approvals in the US and internationally for products in development or if research and development for the early-stage pipeline requires greater financial investment than we anticipated, our business, cash flow, financial condition and results of operations may be harmed
Legal Proceedings and Contingencies” for further information In some cases, manufacturers may seek regulatory approval by submitting their own clinical study data to obtain marketing approval or choose to launch a generic product “at risk” before the expiration of the applicable patent(s) and/or before the final resolution of related patent litigation There is no assurance that a particular product will enjoy market exclusivity for the full time period that appears in the estimates disclosed in this
Generic and biosimilar product manufacturers as well as other groups seeking financial gain are also increasingly seeking to challenge patents before they expire, and we could face earlier-than-expected competition for any products at any time Patents covering our key products have been, and are likely to continue to be, subject to patent litigation For example, in February 2017 one of the EU patents for Sprycel was revoked by the Opposition Division of the EPO We may experience a decline in European revenues upon the entry of generics into the market Refer to “Item 8 Financial Statements and Supplementary Data—Note
Our product supply and related patient access could be negatively impacted by, among other things: (i) product seizures or recalls or forced closings of manufacturing plants; (ii) our failure, or the failure of any of our suppliers, to comply with cGMP and other applicable regulations or quality assurance guidelines that could lead to manufacturing shutdowns, product shortages or delays in product manufacturing; (iii) manufacturing, quality assurance/quality control, supply problems or governmental approval delays; (iv) the failure of a sole source or single source supplier to provide us with the necessary raw materials, supplies or finished goods within a reasonable timeframe and with required quality; (v) the failure of a third-party manufacturer to supply us with bulk active or finished product on time; (vi) construction or regulatory approval delays for new facilities or the expansion of existing facilities, including those intended to support future demand for our biologics products, such as Opdivo; (vii) the failure to meet new and emerging regulations requiring products to be tracked throughout the distribution channels using unique identifiers to verify their authenticity in the supply chain; (viii) other manufacturing or distribution issues, including limits to manufacturing capacity and changes in the types of products produced, such as biologics, physical limitations or other business interruptions; and (ix) disruption in supply chain continuity, including from natural disasters, acts of war or terrorism or other external factors over which we have no control impacting one or more of our facilities or at a critical supplier For example, our new biologics manufacturing facility in Cruiserath, Ireland is expected to be approved for commercial use in early 2020 A delay in the planned opening of the site could impact the supply of our products or require us to obtain product supply from third parties at a significant cost
In addition, at times, the attention of certain members of each company’s management and each company’s resources may be focused on completion of the merger and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and the business of the combined company
Developing and commercializing new compounds and products include inherent risks and uncertainties, including (i) due to efficacy and safety concerns, delayed or denied regulatory approvals, delays or challenges with producing products on a commercial scale or excessive costs to manufacture them; (ii) failure to enter into or implement optimal alliances for the development and/or commercialization of new products; (iii) failure to maintain a consistent scope and variety of promising late-stage products; (iv) failure of one or more of our products to achieve or maintain commercial viability; and (v) changes in regulatory approval processes may cause delays or denials of new product approvals
If our pending acquisition of Celgene is consummated, our stockholders’ ownership percentage will be diluted
Risks Related to the Proposed Acquisition of Celgene
We and Celgene may have difficulty attracting, motivating and retaining executives and other key employees in light of the proposed acquisition
Legal Proceedings and Contingencies,” and could become targets of additional actions and lawsuits, which could result in substantial costs and may delay or prevent the acquisition from being completed
We may not realize the anticipated benefits and synergies from our proposed acquisition of Celgene
The public announcement of data from our clinical studies, or those of our competitors, or news of any developments related to our, or our competitors', products or late-stage compounds may cause significant volatility in our stock price and depending on the data, may result in an adverse impact on our business, financial condition or results of operations If the development of any of our key IO compounds, whether alone or as part of a combination therapy, is delayed or discontinued or a clinical study does not meet one or more of its primary endpoints, our stock price could decline significantly and there may be an adverse impact on our business, financial condition or results of operations
We rely on suppliers, vendors, outsourcing partners, alliance partners and other third parties to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, selling, human resource, finance, IT and other business unit and functional services and meet their contractual, regulatory and other obligations Using these third parties poses a number of risks, such as: (i) they may not perform to our standards or legal requirements, for example, in relation to the outsourcing of significant clinical development activities for innovative medicines to some contract research organizations; (ii) they may not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary information; (v) they may incur a significant cyberattack or business disruption; (vi) disputes may arise with respect to ownership of rights to technology developed with our partners; and (vii) disagreements could cause delays in, or termination of, the research, development or commercialization of the product or result in litigation or arbitration Moreover, some third parties are located in markets subject to political and social risk, corruption, infrastructure problems and natural disasters, in addition to country specific privacy and data security risk given current legal and regulatory environments The failure of any critical third party to meet its obligations, including for future royalty and milestone payments; adequately deploy business continuity plans in the event of a crisis; and/or satisfactorily resolve significant disagreements with us or address other factors, could have a material adverse impact on our operations and results In addition, if these third parties violate, or are alleged to have violated, any laws or regulations, including the local pharmaceutical code, US Foreign Corrupt Practice Act, UK Bribery Act and other similar laws and regulations, during the performance of their obligations for us, it is possible that we could suffer financial and reputational harm or other negative outcomes, including possible legal consequences
$17 billion
The announcement of data from our clinical studies, or those of our competitors, or news of any developments related to our, or our competitors', products or late-stage compounds, such as Opdivo, may cause significant volatility in our stock price and depending on the news, may result in an adverse impact on our business, financial condition or results of operations Furthermore, the announcement of any negative or unexpected data or the discontinuation of development of any of our key IO compounds, whether alone or as part of a combination therapy, any delay in our anticipated timelines for filing for regulatory approval or a significant advancement of a competitor, may cause our stock price to decline significantly and may have an adverse impact on our business, financial condition or results of operations There is no assurance that data from our clinical studies will support filings for regulatory approval, or that our key IO compounds may prove to be effective or as effective as other competing compounds, or even if approved, that any of our key IO compounds will become commercially successful for all approved indications
We and Celgene are the targets of a securities class action and derivative lawsuit in connection with the acquisition, described under “Item 8 Financial Statements and Supplementary Data—Note
in 2018 Our pretax income could be adversely affected if the royalty streams decline in future periods
The declaration, amount and timing of any dividends fall within the discretion of our Board of Directors The Board's decision will depend on many factors, including our financial condition, earnings, capital requirements, debt service obligations, industry practice, legal requirements, regulatory constraints and other factors that our Board may deem relevant A reduction or elimination of our dividend payments or dividend program could adversely affect our stock price In addition, we could, at any time, decide not to buy back any more shares in the market, which could also adversely affect our stock price
Our products continue to be subject to increasing pressures across the portfolio from market access, pricing and discounting and other restrictions in the US, the EU and other regions around the world, including from (i) rules and practices of MCOs and institutional and governmental purchasers; (ii) government administrative and policy changes and changes in laws and regulations for federal healthcare programs such as Medicare and Medicaid, other government actions and inquiries at the federal level (including the proposals contained in the
Furthermore, if our and Celgene’s key employees depart or are at risk of departing, including because of issues relating to the uncertainty and difficulty of integration, financial security or a desire not to become employees of the combined business, we may have to incur significant costs in retaining such individuals or in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of Celgene, and our ability to realize the anticipated benefits of the merger may be materially and adversely affected Accordingly, no assurance can be given that we will be able to attract or retain key employees of Celgene to the same extent that Celgene has been able to attract or retain employees in the past
Due to the specialized scientific and managerial nature of our business, we and Celgene rely heavily on our ability to attract and retain qualified scientific, technical and managerial personnel The competition for qualified personnel in the pharmaceutical field is intense and our success after the transaction will depend in part on our ability to retain scientific and technical personnel and other key employees of Celgene Uncertainty about the effect of the merger on our and Celgene employees may have an adverse effect on each of us and Celgene separately and consequently the combined business This uncertainty may impair our and/or Celgene’s ability to attract, retain and motivate key personnel Employee retention may be particularly challenging during the pendency of the merger, as our and Celgene’s employees may experience uncertainty about their future roles in the combined business
out-licensed intellectual property and the Merck patent infringement settlement Pretax income generated from royalties was approximately

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