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Bristol Myers Squibb announced it will acquire RayzeBio for approximately $4.1 billion. This marks the pharmaceutical giant’s second multi-billion dollar deal within a week, following the $14 billion buyout of schizophrenia drug developer Karuna Therapeutics announced on Friday.
The urgency demonstrated by Bristol Myers in recent acquisitions is attributed to the impending loss of patent protection for some of its established therapies in the coming decade.
William Blair and analyst Matt Phipps note that these recent deals underscore the company’s commitment to expanding its product pipeline. Through the RayzeBio acquisition, Bristol Myers gains access to a late-stage targeted radiopharma therapy, RYZ101. The innovative treatment functions like a ‘canon ball,’ delivering radioactive particles to tumorous tissues or tumor-associated cells to combat cancer cells effectively.
Additionally, the deal includes access to RayzeBio’s manufacturing facility in Indianapolis, Indiana. The financial terms of the acquisition stipulate that Bristol Myers will pay $62.50 in cash for each share of RayzeBio, representing a significant premium of 104% over the stock’s last close.
RayzeBio shares, which had already seen a 27% increase since their market debut in September, more than doubled to $61.40 in early trading following the announcement.
However, Bristol Myers’ shares experienced a 1.5% decline. Analyst Matt Phipps emphasizes the continued strength in large pharmaceutical companies’ balance sheets, highlighting the trend of acquisitions in the biotech sector.
Bristol Myers’ recent moves align with similar strategic initiatives by other industry players, including AbbVie, which has closed two multi-billion dollar deals since November. AstraZeneca announced a $1.2 billion acquisition of China’s Gracell Biotechnologies.
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