(Bloomberg) -- Bristol-Myers Squibb Co.'s mega-deal for Celgene Corp. has a notable sweetener for the seller: its shareholders will get an extra $9 per share in cash if regulators green-light some of its drugs over the next three years.
They're entitled to that bonus through a so-called contingent value right, or CVR, a security entitling the seller to more money if the company achieves certain milestones or performance targets over time.
CVRs are often used when buyers and sellers can't see eye-to-eye on price.
They are fairly rare in big public mergers, as they can be complex and don't always pay out. They're primarily used in life-sciences or pharmaceutical deals, particularly small ones involving closely held or thinly traded companies.
Cipla Ltd.'s pending takeover of Avenue Therapeutics Inc. has a CVR. So does Mereo BioPharma Group Plc.'s proposed combination with OncoMed Pharmaceuticals Inc. and Bioblast Pharma Ltd.'s deal for Enlivex Therapeutics Ltd.
To contact the reporter on this story: Matthew Monks in New York at mmonks1@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Amy Thomson
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