Bristol-Myers Squibb to Acquire Mirati Therapeutics in $5.8 Billion Deal
Bristol-Myers Squibb Expands Oncology Business with Mirati Therapeutics Acquisition
Bristol-Myers Squibb announced its plans to acquire cancer drugmaker Mirati Therapeutics for up to $5.8 billion. This strategic move aims to diversify Bristol’s oncology business and offset potential revenue loss from patent expirations in the future.
Mirati’s Portfolio of Genetic-Driven Cancer Drugs
The acquisition will grant Bristol access to Mirati’s portfolio of drugs that target specific genetic drivers of different cancers. One of the notable drugs is Krazati, approved in December, which focuses on lung cancer treatment. Additionally, Bristol executives express interest in MRTX1719, a compound with potential applications in certain types of lung cancer.
Strategic and Financial Benefits for Bristol-Myers Squibb
Adam Lenkowsky, Bristol’s Chief Commercialization Officer, emphasizes that the acquisition not only complements their existing oncology portfolio but also provides financial advantages in the later part of the decade. Bristol will purchase Mirati for $58 per share in cash, totaling around $4.8 billion. With Mirati’s cash reserves of approximately $1.1 billion, the enterprise value of the deal is estimated at $3.7 billion. Furthermore, Mirati stockholders will receive a non-tradeable contingent value right, potentially worth $12.00 per share in cash, representing an additional $1 billion of value opportunity. Bristol plans to finance the transaction through a combination of cash and debt.
Strengthening Bristol’s Pipeline for the Future
The acquisition of Mirati aligns with Bristol’s goal of growing its diversified oncology portfolio. Chris Boerner, Bristol’s incoming CEO and current chief operating officer, states that Mirati, with its multiple targeted oncology assets including Krazati, is a significant step forward. This move aims to strengthen Bristol Myers Squibb’s pipeline for the latter half of the decade and beyond.
Addressing Challenges and Seizing the Opportunity
Bristol’s decision to acquire Mirati comes at a time when its top drugs, Revlimid and Eliquis, face declining demand due to generic competition. By expanding their oncology business, Bristol aims to counteract potential revenue losses and continue delivering innovative treatments for cancer patients.
Growth Through Strategic Acquisitions
This acquisition follows Bristol’s previous acquisition of Turning Point Therapeutics, a drug developer, for $4.1 billion in cash. These strategic acquisitions bolster Bristol’s arsenal of cancer drugs and reinforce its position in the pharmaceutical industry.
Overall, Bristol-Myers Squibb’s acquisition of Mirati Therapeutics propels the company’s oncology business forward, allowing them to address future challenges, strengthen their portfolio, and continue providing innovative treatments for cancer patients.
