AstraZeneca and Bristol Myers Squibb have held preliminary discussions about a potential merger that would create one of the largest pharmaceutical companies in the world.
The Financial Times first reported the talks, citing people familiar with the matter, noting that a deal could solidify, break down, or face significant delays.
Reuters later confirmed some details through a separate source familiar with the situation, adding further weight to the initial report.
AstraZeneca shares dropped as much as 7% on Monday following the news, reflecting shareholder skepticism about why the company would pursue such a large transaction.
Bristol Myers Squibb rose 2.7% in pre-market trading after closing Friday at $65.31, just shy of a 52-week high and its highest level since June 22, 2023.
A combined entity would carry a value of nearly $400 billion, ranking it among the world’s largest pharmaceutical groups by market capitalization.
AstraZeneca holds a market capitalization of approximately $264 billion, while Bristol Myers Squibb contributes roughly $133 billion to the combined valuation.
Neither company confirmed the report, with AstraZeneca declining to comment and Bristol Myers Squibb not immediately responding to requests for comment outside normal U.S. business hours.
Analysts at Jefferies said they were “a bit perplexed” by the reported talks, arguing AstraZeneca has one of the strongest growth and innovation profiles in the pharmaceutical sector.
Citi analysts added that if the merger talks report were true, it would be a “surprise” given AstraZeneca’s “best-in-class pipeline,” which already positions the company favorably among global peers.
While both companies overlap in oncology, cardiovascular disease, and immunology, their pipelines are largely complementary, with AstraZeneca stronger in solid tumors and Bristol Myers Squibb more focused on blood cancers and cell therapies.
Under CEO Pascal Soriot, who has led the company since 2012, AstraZeneca has set a target of $80 billion in annual revenue by 2030, compared with $58.7 billion last year.
AstraZeneca did report a rare setback when a late-stage clinical trial for a heart disease drug failed to meet its target, raising questions around management credibility given the confidence they had previously communicated.
Bristol Myers Squibb faces upcoming patent expirations on key drugs and mounting generic competition, making a large-scale partnership or merger more strategically appealing from its perspective.
A tie-up could reshape how Bristol Myers funds future research, shares development risk, and positions its oncology portfolio against rivals such as Merck and Pfizer.
Regulators would likely scrutinize any deal closely given the overlapping cancer treatment portfolios both companies currently maintain across several therapeutic areas.
