USA — Bristol Myers Squibb has entered into an agreement to acquire Mirati Therapeutics for US$4.8 billion, in a move aimed at solidifying its position in the field of oncology.
This acquisition comes as Bristol Myers continues to focus on expanding its oncology portfolio.
The pharmaceutical company, known for its blockbuster immunotherapy Opdivo, revealed its intention to purchase Mirati for US$58 per share, marking a price slightly lower than Mirati’s closing stock value on the previous Friday but around one-third higher than its value just a few days earlier.
The interest in Mirati primarily revolves around its groundbreaking lung cancer drug, Krazati, which secured U.S. approval as the second drug of its kind late last year.
Krazati targets tumors driven by mutations in the KRAS gene, which is linked to cancer. It competes with a similar drug developed by Amgen.
Although Amgen had an initial advantage in the market, Mirati is rapidly gaining ground. Bristol Myers reports that Krazati currently accounts for 40% of new prescriptions in the treatment setting where both Krazati and Amgen’s drug are employed.
Both Mirati and Amgen are working to expand the approvals of their respective drugs to encompass earlier stages of treatment and combination therapies with other medications.
In addition to Krazati, Mirati has three other targeted cancer drugs undergoing clinical testing. One of them, named MRTX1719, is also under development for lung cancer, as well as skin and bile duct tumors.
Mirati anticipates launching a Phase 2 study of this drug in the first half of the upcoming year.
Interestingly, Amgen is also developing a therapy similar to MRTX1719, aiming to block an enzyme called PRMT5.
Notably, Bristol Myers has agreed to pay Mirati investors an extra US$12 per share if MRTX1719 successfully undergoes submission to the Food and Drug Administration for approval within seven years post-merger closure.
This payment structure employs a financial instrument called a contingent value right (CVR), commonly used when parties cannot agree on asset valuations. This US$1 billion worth of CVR is part of the deal.
Bristol Myers intends to finance the acquisition using a combination of cash reserves and debt. The completion of the acquisition is expected in the first half of the coming year.
Chris Boerner, Bristol Myers’ current chief operating officer and future CEO starting from November 1, expressed, “With multiple targeted oncology assets including Krazati, Mirati is another important step forward in our efforts to grow our diversified oncology portfolio and further strengthen Bristol Myers Squibb’s pipeline for the latter half of the decade and beyond.”
Bristol Myers Squibb faces patent expirations for two of its top-selling drugs, Opdivo and Eliquis, in the latter half of the decade.
This exposes the company to potential revenue losses amounting to billions. To offset this, the company is banking on newer drugs, including its heart failure drug Camzyos and psoriasis treatment Sotyktu.
The acquisition of Mirati and Krazati aligns with the company’s ongoing commitment to oncology, following its US$4.1 billion purchase of Turning Point Therapeutics, which developed a targeted cancer treatment awaiting FDA approval in late November.
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