Bristol-Myers Squibb has announced its acquisition of Mirati Therapeutics for a potential sum of $5.8 billion, signaling a strategic move to expand its presence in the oncology sector. This acquisition will diversify Bristol’s oncology portfolio and help compensate for anticipated revenue losses resulting from patent expirations later in the decade. The deal encompasses Mirati’s drug portfolio, which focuses on targeting the genetic drivers of specific cancers, including the recently approved lung cancer drug, Krazati. Additionally, Bristol sees potential in MRTX1719, a compound that could be utilized in certain lung cancer cases.
Adam Lenkowsky, Bristol’s Chief Commercialization Officer, highlighted the strategic and financial benefits of the acquisition. The purchase price for Mirati stands at $58 per share in cash, totaling approximately $4.8 billion. Considering Mirati’s existing cash reserves of around $1.1 billion, the enterprise value comes to approximately $3.7 billion. Moreover, Mirati stockholders will receive non-tradeable contingent value rights, potentially worth $12.00 per share in cash, adding an extra $1 billion of value opportunity. To finance the transaction, Bristol-Myers Squibb intends to use a combination of cash and debt.
This move aligns with Bristol’s efforts to bolster its oncology portfolio, particularly in the face of declining demand for key drugs like Revlimid and Eliquis due to generic competition. While the acquisition is strategically beneficial, it is expected to have a dilutive impact on Bristol’s non-GAAP earnings per share by approximately 35 cents per share within the first year after the deal’s closure. This acquisition comes as part of Bristol’s broader strategy to fortify its position in the oncology market, following its previous acquisition of Turning Point Therapeutics for $4.1 billion in cash.
(Source: Reuters | Fierce Pharma)
