On Tuesday, Bristol Myers Squibb announced a purchase of RayzeBio for around $4.1 billion, according to a report. This move is aimed at strengthening Bristol’s cancer drug business and is the second multi-billion dollar deal the company has made in less than a week.
Through this acquisition, Bristol Myers Squibb adds a late-stage targeted cancer therapy from RayzeBio to its portfolio. This therapy, known as RYZ101, utilizes radioactive particles to eliminate tumor cells. Currently, RYZ101 is undergoing late-stage studies specifically for a rare form of pancreatic cancer.
On Friday, Bristol Myers also revealed a $14 billion acquisition of Karuna Therapeutics, a company focused on developing drugs for schizophrenia. This announcement came nearly two months after the newly-appointed CEO, Chris Boerner, officially assumed leadership at Bristol Myers.
Purchases in the Medicine Business
These acquisitions are happening because Bristol Myers is experiencing a decline in sales for its key drugs, namely the blood cancer treatment Revlimid and the blood thinner Eliquis. This decline is due to generic competition, and the company is also anticipating the expiration of patents for other older therapies later in this decade.
The acquisition of RayzeBio “enhances our prospects for growth in the latter part of this decade and beyond,” stated Boerner.
Bristol will also obtain access to RayzeBio’s manufacturing facility in Indianapolis, Indiana, dedicated to radio-pharmaceutical compounds, currently in the construction phase.
The payment for each RayzeBio share will be $62.50 in cash, reflecting a premium of 104% compared to the stock’s recent closing price. As a result, RayzeBio shares surged to $60.95 in premarket trading, doubling their value.
Radiopharmaceutical therapies involve a type of cancer treatment where molecules attach to tumors, and radioactive particles are used to target and destroy specific cells. In October, Eli Lilly made a $1.4 billion agreement to acquire the radiopharmaceutical company Point Biopharma. Bristol’s purchase of RayzeBio is part of a series of recent deals in the biotech sector.
AbbVie has recently made two substantial deals, acquiring drug developer Cerevel Therapeutics for $8.7 billion and cancer drug maker ImmunoGen for $10 billion.
Conclusion
Bristol Myers Squibb spent $4.1 billion to buy RayzeBio, boosting its cancer drug efforts after a $14 billion deal with Karuna Therapeutics. Facing sales drops and patent challenges, Bristol aims for growth by acquiring RayzeBio’s late-stage cancer therapy and manufacturing facility. Other industry moves include Eli Lilly’s $1.4 billion purchase of Point Biopharma and AbbVie’s big deals, showing a changing pharmaceutical landscape.
