Bristol-Myers Squibb to acquire cancer drugmaker Turning Point for $4.1bn

Bristol-Myers Squibb has agreed to acquire Turning Point Therapeutics for $4.1bn in the latest in a series of bolt-on acquisitions by pharmaceutical companies looking to bolster their drug pipelines.

The New York-based drug company said on Friday it would pay $76 per share to buy the clinical-stage company, which has a drug candidate in the late stages of development that targets non-small cell lung cancer, which accounts for 80 per cent of all cases in the US.

The acquisition is the largest by BMS in just under two years and analysts said it could strengthen the company’s oncology portfolio as Turning Point has several early stage clinical assets targeting different cancers.

Turning Point’s leading drug candidate Repotrectinib has been granted breakthrough therapy designation from the US Food and Drug Administration — a process designed to expedite drug approval.

“With Repotrectinib, we have the opportunity to change the standard of care and address a significant unmet medical need for ROS1-positive non-small-cell lung cancer patients,” said Samit Hirawat, BMS chief medical officer.

BMS said it expects to launch Repotrectinib in the US in 2023.

The global oncology market is one of the fastest-growing within the pharmaceutical sector and was worth $286bn in 2021, according to Precedence Research, a market research firm.

BMS is one of several large pharmaceutical companies, including Pfizer and GlaxoSmithKline, that are aiming to bolster their pipelines as some of their blockbuster drugs come off patent. In April BMS reduced its full-year 2022 earnings forecast, citing stronger than expected generic competition for its former top selling cancer drug Revlimid, which recently lost exclusivity.

“I see this as incrementally positive for Bristol, not significantly needle-moving, but [it] adds to the company’s oncology franchise, with a potential approval of the company’s lead asset Repotrectinib in the second half of 2023,” said Evan Seigerman, analyst at BMO Capital Markets.

Seigerman said he expected to see large pharmaceutical companies continue to execute bolt-on acquisitions but a few larger deals are possible as companies seek to use large cash piles built up during the pandemic.

“We estimate approximately $55bn in additional deal capacity over the course of 2022 and nearly $90bn by 2024,” said Seigerman.

Last month GSK announced the acquisition of Boston-based biotech Affinivax in a transaction worth up to $3.3bn and Pfizer bought Biohaven Pharmaceuticals for $11.6bn.

BMS is paying a 122.5 per cent premium to Turning Point’s last closing share price of $34.16 and said it expects the deal to boost earnings per share from 2025.