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Bristol-Myers Squibb Shares Just Spiked on Reports of a Carl Icahn Stake

February 21, 2017, 10:01 PM UTC
Delivering Alpha - Season 2016
Carl Icahn during his keynote at the 6th annual CNBC Institutional Investor Delivering Alpha Conference, Sept.13, 2016 in New York.
Heidi Gutman—CNBC/NBCU Photo Bank via Getty Images

Bristol-Myers Squibb shares spiked as much as 4% in afternoon trading on a Dow Jones report that Carl Icahn has purchased a stake in the pharma giant.

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The billionaire investor approves of Bristol-Myers’ experimental drug pipeline and believes it to be an acquisition target, according to the Wall Street Journal. The size of Icahn’s stake remains unknown, but it’s reportedly a big one.

Icahn’s involvement in Bristol-Myers Squibb could be a harbinger for a future deal. The noted activist has guided a number of prominent biopharma M&As to the finish line – ironically enough, he’s actually convinced two companies to reject BMS bids outright or hold out for higher ones.

While Bristol-Myers shares closed in green territory Tuesday, its performance has been far more dire in recent times. The stock is down 14% over the last 12 months and 6% year-to-date over struggles in its star cancer immunotherapy franchise, which has lost some ground to rivals like Merck (MRK) in the lucrative lung cancer market.

But a lower market cap combined with a promising pipeline could create the perfect conditions for a takeover. Bristol-Myers has been shaking up its board in recent months and announced the addition of three new director positions on Tuesday.