Bristol Myers Squibb Completes Acquisition of Mirati Therapeutics, Strengthening and Diversifying Oncology Portfolio
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- The acquisition is expected to be dilutive to Bristol Myers Squibb's non-GAAP earnings per share by approximately $0.35 per share in 2024.
Insights
The acquisition of Mirati Therapeutics by Bristol Myers Squibb (BMS) represents a strategic move to enhance BMS's oncology portfolio, notably with the addition of KRAZATI and other developmental assets. The immediate cessation of Mirati's trading on the NASDAQ underscores the finality of this transaction, effectively integrating Mirati's resources into BMS's operations. From a market perspective, this acquisition could potentially bolster BMS's competitive position in the oncology market, particularly in lung cancer therapeutics, which is a high-revenue segment. The dilutive effect on non-GAAP earnings per share, estimated at $0.35 for 2024, suggests an initial financial burden that stakeholders should be aware of, although this is a common occurrence in such acquisitions as short-term costs precede long-term gains.
The clinical significance of adding KRAZATI (adagrasib) to BMS's lineup cannot be overstated, as it represents a new treatment option for lung cancer, which remains a leading cause of cancer-related mortality. The inclusion of a potential first-in-class MTA-cooperative PRMT5 inhibitor, along with the KRAS and KRAS enabling program, signals BMS's commitment to targeting key pathways in oncogenesis. These assets may offer novel mechanisms of action compared to existing treatments, potentially addressing unmet medical needs and improving patient outcomes. The success of these assets in clinical development is crucial for their impact on both patient care and BMS's market share in oncology.
From a financial standpoint, the acquisition's impact on BMS's earnings reflects the significant investment in Mirati's promising pipeline. While the forecasted dilution of earnings per share suggests a short-term financial impact, the long-term potential for revenue growth through new drug approvals and market penetrations needs to be considered. The strategic alignment of Mirati's assets with BMS's existing oncology portfolio could lead to synergies that enhance research and development efficiency, reduce time to market and ultimately improve the return on investment. Monitoring the progression of Mirati's assets through clinical trials and their subsequent market performance will be key in evaluating the financial success of this acquisition.
“The closing of the Mirati transaction is a significant milestone in our efforts to further diversify our oncology portfolio and strengthen our pipeline in the latter half of the decade and beyond,” said Chris Boerner, Ph.D., Chief Executive Officer, Bristol Myers Squibb. “Mirati’s incredibly talented employees have built a strong portfolio of assets and capabilities that are highly complementary with BMS’. We welcome them and look forward to working together to leverage BMS’ global scale and resources to deliver more treatments for cancer patients, faster.”
Through this transaction, BMS has added commercialized lung cancer medicine KRAZATI (adagrasib) to its oncology portfolio as well as several promising clinical assets, including a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase 1 development, and a leading KRAS and KRAS enabling program with two candidates in Phase 1 development.
The transaction is expected to be treated as a business combination and to be dilutive to Bristol Myers Squibb’s non-GAAP earnings per share by approximately
Advisors
Evercore Inc. and Morgan Stanley & Co. LLC are serving as financial advisors to Bristol Myers Squibb, and Kirkland & Ellis LLP is serving as legal counsel. Centerview Partners LLC is serving as financial advisor to Mirati, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.
About Bristol Myers Squibb
Bristol Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube, Facebook and Instagram.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, the acquisition of Mirati by Bristol Myers Squibb. These statements may be identified by the fact they use words such as “should,” “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance, although not all forward-looking statements contain such terms. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. These statements are only predictions, and such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Actual results may differ materially from current expectations because of numerous risks and uncertainties including with respect to (i) the risk that the expected benefits or synergies of the acquisition will not be realized, (ii) the risk that legal proceedings may be instituted related to the merger agreement, and (iii) unanticipated difficulties or expenditures relating to the transaction, the response of business partners and competitors to the consummation of the transaction and/or potential difficulties in employee retention as a result of the consummation of the transaction. Forward-looking statements in this communication should be evaluated together with the many uncertainties that affect Bristol Myers Squibb’s business, particularly those identified in the cautionary factors discussion in Bristol Myers Squibb’s Annual Report on Form 10-K for the year ended December 31, 2022, and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and in Mirati’s Annual Report on Form 10-K for the year ended December 31, 2022 and its subsequent Quarterly Reports on Form 10-Q , as well as other documents that may be filed by Bristol Myers Squibb from time to time with the SEC. Neither Bristol Myers Squibb nor Mirati undertakes any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made.
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Source: Bristol Myers Squibb
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