Exhibit (a)(6)
[Letterhead of Morgan Stanley & Co. Incorporated]
September 19, 2001
Board of Directors
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Members of the Board:
We understand that ImClone Systems Incorporated ("ImClone"), Bristol-Myers
Squibb Company ("Bristol"), and Acquisition Sub, a wholly-owned subsidiary of
Bristol, propose to enter into a Development, Promotion, Distribution and
Supply Agreement (the "Commercial Agreement"), an Acquisition Agreement (the
"Acquisition Agreement") and a Stockholder Agreement (collectively with the
Commercial Agreement and the Acquisition Agreement, the "Agreements"), each
substantially in the form of the drafts of such agreements dated as of
September 19, 2001 provided to Morgan Stanley.
The Acquisition Agreement provides, among other things, for the commencement by
Acquisition Sub of a tender offer (the "Tender Offer") for 14,392,003 of the
outstanding shares of common stock, par value $.001 per share (the "Common
Stock"), of ImClone for $70.00 per share net to the seller in cash (the
"Consideration"). We also note that the Agreements provide, among other things,
for, (i) the payment by Bristol to ImClone of milestones in the aggregate
amount of $1,000,000,000, $200,000,000 of which is payable at signing and the
remainder of which is based upon the achievement of certain regulatory
objectives by ImClone, (ii) the granting to Bristol by ImClone of (a) a
co-exclusive right to develop and promote and an exclusive right to distribute
ImClone's biologic pharmaceutical product known as IMC-C225 ("IMC-C225") in
North America in return for specified royalties, and (b) a co-exclusive right
to develop, promote and distribute IMC-C225 in Japan in return for profit
participation rights, (iii) the payment by Bristol of certain expenses related
to the further development and commercialization of IMC-C225, and (iv) the
addition of two Bristol representatives to the ImClone Board and the
establishment of certain governance arrangements with respect to ImClone for
the benefit of Bristol. For purposes of this letter, all transactions described
above shall be defined collectively as the "Transactions." The terms and
conditions of the Transactions are more fully set forth in the Agreements.
You have asked for our opinion as to whether the Consideration to be received
by the holders of shares of Common Stock pursuant to the Acquisition Agreement
is fair to such holders from a financial point of view.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of ImClone and Bristol;
(ii) reviewed certain internal financial statements and other financial
and operating data concerning ImClone prepared by the management of
ImClone;
(iii) reviewed the past and current operations and financial condition and
the prospects of ImClone with senior executives of ImClone;
(iv) reviewed certain financial projections with respect to IMC-C225 and
related matters prepared by the managements of ImClone and Bristol,
respectively;
(v) reviewed certain financial projections with respect to the entire
business of ImClone, including but not limited to IMC-C225, prepared
by the management of ImClone;
(vi) reviewed the pro-forma impact of the Transactions on ImClone's
projected revenues, costs, income and earnings per share;
(vii) reviewed information relating to certain strategic, financial and
operational benefits anticipated from the Transactions, prepared by
the managements of ImClone and Bristol, respectively;
(viii) reviewed the reported prices and trading activity for the Common
Stock;
(ix) compared the financial performance of ImClone and the prices and
trading activity of the Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(x) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition, partial acquisition and product
licensing transactions;
(xi) participated in discussions and negotiations among representatives of
ImClone, its legal advisors, Bristol and its financial and legal
advisors;
(xii) reviewed drafts provided to us of the Agreements and other related
documentation; and
(xiii) performed such other analyses as we have deemed appropriate and
considered such other factors as we have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, including information
relating to certain strategic, financial and operational benefits anticipated
from the Transactions, we have assumed that they have been reasonably prepared
on bases reflecting the best currently available estimates and judgments of the
future financial performance of ImClone and of IMC-C225. In addition, we have
assumed that the Transactions will be consummated in accordance with the terms
set forth in the Agreements. We have further assumed that in connection with
the Transactions, ImClone and Bristol will receive all regulatory approvals
necessary for completion of the Tender Offer, without any restrictions that
would have an adverse effect on the consummation of or benefits expected from
the Transactions. We have not made any independent valuation or appraisal of
the assets or liabilities of ImClone, nor have we been furnished with any such
appraisals. Our opinion is necessarily based on financial, economic, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof.
In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party with respect to a strategic transaction with
ImClone.
We have acted as financial advisor to the Board of Directors of ImClone in
connection with this transaction and will receive a fee for our services. In
the past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory and financing services for ImClone and Bristol and have
received fees for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of ImClone and may not be used for any other purpose without our
prior written consent, except that this opinion may be included in its
entirety, if required, in any filing made by ImClone in respect of the
Transactions with the Securities and Exchange Commission and distributed to
stockholders of ImClone. In addition, Morgan Stanley expresses no opinion or
recommendation as to whether shareholders of ImClone should tender their shares
of Common Stock into the Tender Offer.
2
Based upon and subject to the foregoing, we are of the opinion on the date
hereof that the Consideration to be received by the holders of shares of Common
Stock pursuant to the Acquisition Agreement is fair to such holders from a
financial point of view.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Peter N. Crnkovich
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Peter N. Crnkovich
Managing Director