The biggest pharmaceutical companies count on multibillion-dollar drugs to fund their expensive research units and justify high share prices. But now investors want more, demanding that companies queue up the next crop of top products before the current generation even hits peak profitability. This conundrum is at the heart of the industry's biggest merger deal. Bristol-Myers Squibb Co. on Jan. 3 agreed to pay $74 billion in cash and stock for Celgene Corp., a New Jersey biotech that gets almost two-thirds of its revenue from a single medicine: the blood cancer pill Revlimid, the third-biggest-selling drug in the world, with almost $11 billion in revenue expected this year, according to analyst estimates compiled by Bloomberg.
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