Both Amgen Inc. (NASDAQ: AMGN) and Celgene Corp. (NASDAQ: CELG) shares made a handy gain on Monday after it was announced that the companies had made an agreement in relation to Celgene’s merger with Bristol-Myers Squibb Co. (NYSE: BMY).

Essentially, Amgen is buying worldwide rights to Otezla, Celgene’s treatment for psoriasis and psoriatic arthritis, for a total of $13.4 billion in cash.

Sales of Otezla in 2018 were $1.6 billion driven by strong volume growth. Amgen has stated previously that it will focus on medicines that can deliver sustained, long-term volume-driven growth and the company believes there is a significant opportunity to grow Otezla through global expansion and new indications, with expectations for Otezla to realize at least low double-digit sales growth, on average, over the next five years.

The closing of the acquisition is contingent on Bristol-Myers Squibb entering into a consent decree with the Federal Trade Commission in connection with the pending Celgene merger, The transaction is expected to close by the end of 2019.

Some might argue against this acquisition by Amgen as the company is already saddled with debt. A quick look at its balance sheet reveals that the firm has roughly $29.5 billion in long-term debt and only about $6.95 billion in cash and cash equivalents.

Robert A. Bradway, board chair and chief executive at Amgen, commented:

The acquisition of Otezla offers a unique opportunity for Amgen to provide patients an innovative oral therapy for psoriasis and psoriatic arthritis that fits squarely within our portfolio and complements our Enbrel and Amgevita brands. We will take advantage of our 20 years of experience in inflammatory disease to realize the full global potential of Otezla as an affordable option for patients with these serious, chronic inflammatory conditions.

Shares of Amgen were last seen up about 3% at $204.94, in a 52-week range of $166.30 to $211.90. The consensus price target is $209.45.

Celgene shares were last seen up nearly 3% at $96.64, in a 52-week range of $58.59 to $98.97. The consensus price target is $96.80.

Bristol-Myers recently traded up about 3% at $47.88 a share, in a 52-week range of $42.48 to $63.69.

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