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Bristol Myers (BMY) to Buy Cancer Drug-Maker RayzeBio for $4.1B
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Bristol Myers (BMY - Free Report) announced that it has entered into a definitive merger agreement to acquire radiopharmaceutical therapeutics (RPT) company RayzeBio for $62.50 per share in cash, amounting to a total equity value of approximately $4.1 billion.
The acquisition agreement will add RayzeBio’s proprietary radiopharmaceutical platform, along with its innovative pipeline of potentially first-in-class and best-in-classactinium-based RPTs, to Bristol Myers’ oncology portfolio. BMY believes that the novel mechanism of action of the RPT candidates, inducing cancer cell death through targeted radiation, could quench the high and unmet need for more effective treatments in solid tumor indications, thereby strengthening growth opportunities for the company.
Solid tumor indications presently targeted by RayzeBio’s current pipeline programs include gastroenteropancreatic neuroendocrine tumors (GEP-NETs), small cell lung cancer (SCLC), hepatocellular carcinoma and other cancers. Furthermore, Bristol Myers is looking forward to utilizing RayzeBio’s distinguished radiopharmaceutical platform to develop several additional therapeutic candidates in the future.
Year to date, shares of Bristol Myers have lost 28.5% compared with the industry’s 16.1% decline.
Image Source: Zacks Investment Research
RayzeBio’s clinical-stage pipeline comprises its lead candidate, RYZ101, a targeted radiopharmaceutical drug designed to deliver Actinium-225 to solid tumors expressing the somatostatin receptor (SSTR). RYZ101 is currently being evaluated in a phase III study in patients with SSTR-positive GEP-NETs who have previously been treated with lutetium-177-based somatostatin therapies. Enrollment in the late-stage study is ongoing.
Per Bristol Myers’ press release, RayzeBio had previously reported positive interim results from the phase Ib portion of the ACTION-1 clinical program of RYZ101 for GEP-NETs, observing encouraging efficacy and tolerability data. RayzeBio is also currently enrolling patients in a phase Ib study to evaluate RYZ101 as a first-line treatment of extensive-stage SCLC in combination with standard-of-care therapy.
Apart from its lead candidate, RayzeBio has several other preclinical candidates following the same novel mechanism of action for the treatment of other solid tumor indications. Two of these candidates are currently being evaluated in investigational new drug-enabling studies to treat hepatocellular carcinoma and renal cell cancer.
The acquisition agreement will allow RayzeBio to leverage BMY’s expertise in the oncology market and vast resources and infrastructure to propel its preclinical and clinical programs and advance its highly innovative radiopharmaceutical platform. RayzeBio’s stock climbed 100.9% in the last trading session as the investors cheered the acquisition agreement.
The press release states that the acquisition agreement has been unanimously approved by the board of directors of both Bristol Myers and RayzeBio. The transaction is expected to be completed in the first half of 2024, subject to the fulfillment of certain customary and regulatory conditions.
The transaction is expected to dilute BMY’s bottom line by approximately 13 cents in 2024.
Bristol Myers is currently in transition mode as it shifts its mature product portfolio, which is facing generic competition due to new drugs. The company is looking to offset its declining revenues with the help of the blockbuster multiple myeloma drug (MM) Revlimid and blood thinner medicine Eliquis due to generic competition.
The acquisition of RayzeBio marks the third acquisition deal struck by Bristol Myers in the fourth quarter of 2023, after the acquisition of Mirati Therapeutics in October, followed by the acquisition of Karuna Therapeutics , which was announced last week. The purpose of these deals is to diversify Bristol Myers’ portfolio of new drugs.
The $4.8 billion acquisition of Mirati Therapeutics will add its lung cancer drug Krazati (adagrasib) to BMY’s strong oncology portfolio. The drug was approved by the FDA in December 2022 for the treatment of adult patients with KRAS-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) who have received at least one prior systemic therapy.
Apart from Krazati, Mirati is also evaluating other pipeline candidates, including PRMT5 inhibitor MRTX1719, SOS1 inhibitor MRTX0902 and KRASG12D inhibitor MRTX1133 candidates, which are being evaluated in separate early-stage clinical studies.
The addition of these candidates will further diversify Bristol Myers’ already strong new oncology products franchise comprising its immuno-oncology drug Opdivo, which was approved for multiple cancer indications, MM drugPomalyst, leukemia drug Sprycel and melanoma drug Yervoy, among others.
Similarly, with the $14 billion acquisition of Karuna Therapeutics, BMY is looking to establish its presence in the schizophrenia space, which is challenging but has enormous potential given the lack of treatments. The transaction will add Karuna’s lead asset, KarXT (xanomeline-trospium), an antipsychotic with a novel mechanism of action and differentiated efficacy and safety. The new drug application for KarXT for the treatment of schizophrenia in adults is under review in the United States, with a regulatory decision expected by September 2024-end. A commercial launch is expected before 2024-end.
Apart from schizophrenia, Karuna is also evaluating KarXT as a potential treatment for psychosis in Alzheimer’s disease (AD). Based on the novel approach utilized by KarXT, Bristol Myers believes that the drug also has the potential to treat additional neurological indications like bipolar I disorder and agitation associated with AD indication.
Image: Bigstock
Bristol Myers (BMY) to Buy Cancer Drug-Maker RayzeBio for $4.1B
Bristol Myers (BMY - Free Report) announced that it has entered into a definitive merger agreement to acquire radiopharmaceutical therapeutics (RPT) company RayzeBio for $62.50 per share in cash, amounting to a total equity value of approximately $4.1 billion.
The acquisition agreement will add RayzeBio’s proprietary radiopharmaceutical platform, along with its innovative pipeline of potentially first-in-class and best-in-classactinium-based RPTs, to Bristol Myers’ oncology portfolio. BMY believes that the novel mechanism of action of the RPT candidates, inducing cancer cell death through targeted radiation, could quench the high and unmet need for more effective treatments in solid tumor indications, thereby strengthening growth opportunities for the company.
Solid tumor indications presently targeted by RayzeBio’s current pipeline programs include gastroenteropancreatic neuroendocrine tumors (GEP-NETs), small cell lung cancer (SCLC), hepatocellular carcinoma and other cancers. Furthermore, Bristol Myers is looking forward to utilizing RayzeBio’s distinguished radiopharmaceutical platform to develop several additional therapeutic candidates in the future.
Year to date, shares of Bristol Myers have lost 28.5% compared with the industry’s 16.1% decline.
Image Source: Zacks Investment Research
RayzeBio’s clinical-stage pipeline comprises its lead candidate, RYZ101, a targeted radiopharmaceutical drug designed to deliver Actinium-225 to solid tumors expressing the somatostatin receptor (SSTR). RYZ101 is currently being evaluated in a phase III study in patients with SSTR-positive GEP-NETs who have previously been treated with lutetium-177-based somatostatin therapies. Enrollment in the late-stage study is ongoing.
Per Bristol Myers’ press release, RayzeBio had previously reported positive interim results from the phase Ib portion of the ACTION-1 clinical program of RYZ101 for GEP-NETs, observing encouraging efficacy and tolerability data. RayzeBio is also currently enrolling patients in a phase Ib study to evaluate RYZ101 as a first-line treatment of extensive-stage SCLC in combination with standard-of-care therapy.
Apart from its lead candidate, RayzeBio has several other preclinical candidates following the same novel mechanism of action for the treatment of other solid tumor indications. Two of these candidates are currently being evaluated in investigational new drug-enabling studies to treat hepatocellular carcinoma and renal cell cancer.
The acquisition agreement will allow RayzeBio to leverage BMY’s expertise in the oncology market and vast resources and infrastructure to propel its preclinical and clinical programs and advance its highly innovative radiopharmaceutical platform. RayzeBio’s stock climbed 100.9% in the last trading session as the investors cheered the acquisition agreement.
The press release states that the acquisition agreement has been unanimously approved by the board of directors of both Bristol Myers and RayzeBio. The transaction is expected to be completed in the first half of 2024, subject to the fulfillment of certain customary and regulatory conditions.
The transaction is expected to dilute BMY’s bottom line by approximately 13 cents in 2024.
Bristol Myers is currently in transition mode as it shifts its mature product portfolio, which is facing generic competition due to new drugs. The company is looking to offset its declining revenues with the help of the blockbuster multiple myeloma drug (MM) Revlimid and blood thinner medicine Eliquis due to generic competition.
Bristol Myers Squibb Company Price and Consensus
Bristol Myers Squibb Company price-consensus-chart | Bristol Myers Squibb Company Quote
The acquisition of RayzeBio marks the third acquisition deal struck by Bristol Myers in the fourth quarter of 2023, after the acquisition of Mirati Therapeutics in October, followed by the acquisition of Karuna Therapeutics , which was announced last week. The purpose of these deals is to diversify Bristol Myers’ portfolio of new drugs.
The $4.8 billion acquisition of Mirati Therapeutics will add its lung cancer drug Krazati (adagrasib) to BMY’s strong oncology portfolio. The drug was approved by the FDA in December 2022 for the treatment of adult patients with KRAS-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) who have received at least one prior systemic therapy.
Apart from Krazati, Mirati is also evaluating other pipeline candidates, including PRMT5 inhibitor MRTX1719, SOS1 inhibitor MRTX0902 and KRASG12D inhibitor MRTX1133 candidates, which are being evaluated in separate early-stage clinical studies.
The addition of these candidates will further diversify Bristol Myers’ already strong new oncology products franchise comprising its immuno-oncology drug Opdivo, which was approved for multiple cancer indications, MM drugPomalyst, leukemia drug Sprycel and melanoma drug Yervoy, among others.
Similarly, with the $14 billion acquisition of Karuna Therapeutics, BMY is looking to establish its presence in the schizophrenia space, which is challenging but has enormous potential given the lack of treatments. The transaction will add Karuna’s lead asset, KarXT (xanomeline-trospium), an antipsychotic with a novel mechanism of action and differentiated efficacy and safety. The new drug application for KarXT for the treatment of schizophrenia in adults is under review in the United States, with a regulatory decision expected by September 2024-end. A commercial launch is expected before 2024-end.
Apart from schizophrenia, Karuna is also evaluating KarXT as a potential treatment for psychosis in Alzheimer’s disease (AD). Based on the novel approach utilized by KarXT, Bristol Myers believes that the drug also has the potential to treat additional neurological indications like bipolar I disorder and agitation associated with AD indication.
Zacks Rank
Bristol Myers currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.