(Reuters) - Amgen Inc will buy Celgene Corp’s psoriasis drug Otezla for $13.4 billion in cash, clearing the way for Bristol-Myers Squibb to go ahead with its $74 billion deal for Celgene by the end of the year.

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Amgen, which announced the deal on Monday, is paying a hefty price for the drug, according to analysts and investors. Still, Otezla, which brought in sales of $1.61 billion last year, will deliver growth for Amgen right away, and its shares rose around 3 percent in afternoon trading.

Bristol-Myers and Celgene’s shares were both also up around 3 percent.

New York-based Bristol-Myers said in June that it would sell Otezla to allay concerns raised by the U.S. Federal Trade Commission because of a competing treatment that it is developing. Analysts said at the time that they were expecting Otezla to sell for around $8 billion to $10 billion.

Bristol-Myers said in a statement that there was significant interest from multiple potential buyers from early on in the process.

Thousand Oaks, California-based Amgen said that it expects Otezla’s sales to grow at least in the low-double digits over the next five years. It also said it expects the drug’s patents to protect its exclusivity in the United States until 2028.

For an interactive on Otezla sales click:

Jeff Jonas, healthcare portfolio manager at Gabelli funds, said that a number of Amgen’s current drugs face loss of patent protection and competition from biosimilar drugs, so the growth from Otezla would be welcome.

“This is an attractive product for them that fits more or less with their current portfolio,” Jonas said. “It’s an approved product with a good safety profile, so there’s not a lot of risk.”

Still, Jonas expressed some skepticism about Amgen’s growth forecast for the drug, noting that new competitors, including Bristol-Myers’ drug in development, are likely to eat into its market share.

Amgen said it expects the deal to produce tax benefits with a present cash value of $2.2 billion, reducing the actual deal total to $11.2 billion.

With respect to possible antitrust concerns about the purchase, Amgen said on a conference call that it feels very confident that it will be able to close the deal.

Bristol-Myers said most of the proceeds from the sale will go to pay down debt from the deal with Summit, New Jersey-based Celgene. It also increased a previously planned $5 billion accelerated share buyback to $7 billion.