Bristol-Myers to Buy Turning Point Therapeutics for $4.1 Billion
Bristol-Myers Squibb Co. said it will acquire biotechnology company
Turning Point Therapeutics Inc.
for $4.1 billion, an effort to deepen the biopharmaceutical giant’s position in lung-cancer treatments.
The purchase price of $76 a share in cash is more than double Thursday’s closing price of $34.16 for Turning Point, but well below the trading price of the San Diego-based company before biotechnology stocks dropped starting last fall.
Bristol, of New York, said it would use cash on hand to fund the acquisition, which it expects to complete in the third quarter.
Turning Point’s lead experimental drug, called repotrectinib, is a so-called tyrosine kinase inhibitor targeting the ROS1 and NTRK genes in patients with non-small cell lung cancer and other tumors.
The drug showed promising results in early-stage testing this year, and Bristol said it could be approved by U.S. regulators in the second half of 2023.
Cancer drugs are one of the fastest-growing pharmaceutical areas, with global oncology sales forecast to reach some $265 billion in 2026, according to Cowen.
The deal would expand Bristol’s presence in the lucrative field. Bristol helped pioneer a big-selling class of cancer treatments known as immunotherapies, including Opdivo for lung cancer.
Turning Point shares peaked at $135.90 last February, before the biotech sector in general fell.
Investors have been anticipating deals in the biotech sector, which has been limping for months due to poor study results from some promising drugs.
Bristol’s agreement to buy Turning Point could suggest big drugmakers, which had shied away from big deals as the valuations of potential targets soared, may return to deal making with biotech valuations slumped.
Last month,
Pfizer Inc.
said it would acquire the remaining stake in
Biohaven Pharmaceutical Holding Co.
and its migraine drug for $11.6 billion.
Deal making, including small to midsize deals and partnerships, has been a priority for Bristol as part of its growth strategy, Chief Executive
Giovanni Caforio
said in a recent interview.
Elizabeth Mily, Bristol’s executive vice president of strategy and business development, said the deal furthers the company’s efforts “to bring new medicines into our portfolio that will continue to extend our growth in the back half of the decade.”
Yet drug development is risky, with more experimental drugs failing during clinical trials.
Bristol recently terminated a $1.85 billion partnership with
after disappointing study results from Nektar’s once-promising pipeline.
Repotrectinib would give Bristol a targeted lung-cancer therapy to complement its immunotherapy offerings.
The drug has potential to be approved for both patients who haven’t taken treatments as well as those who have failed other treatments, said
Samit Hirawat,
Bristol’s chief medical officer. He also said the drug has shown in testing to generate a longer duration of response than treatments currently on the market.
If approved, the drug would face competition from other tyrosine kinase inhibitors on the market, such as Pfizer’s Xalkori and Rozlytrek from
Roche Holding AG’s
Genentech business.
said it expected Bristol would test repotrectinib against rival drugs in a bid to show the superiority of its treatment and establish it as the go-to option for cancer doctors.
Turning Point shares more than doubled to $73.61 a share in early trading, while Bristol shares opened flat.
Write to Jared S. Hopkins at jared.hopkins@wsj.com and Colin Kellaher at colin.kellaher@wsj.com
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