- Bristol Myers Squibb is buying biotech Turning Point Therapeutics, announcing Friday a $4.1 billion deal that will give the pharmaceutical company an experimental drug that targets mutations found in lung cancer and other solid tumors.
- The deal values Turning Point at $76 a share, more than double the $34.16 at which shares closed on Thursday and four times the biotech's $18 initial public offering price in 2019. Yet the buyout price is well below the company's peak of $133 a share in February 2021, which gave it a market value of $6.6 billion.
- The company's lead drug, called repotrectinib, has advanced through Phase 2 testing in lung cancer patients whose tumors harbor a mutation called ROS1. Repotrectinib would compete against Roche's Rozlytrek, if approved. Bristol Myers expects to gain Food and Drug Administration clearance in the second half of 2023.
The tumbling valuations of many biotech companies have made them more attractive targets for big drugmakers, while shrinking cash holdings have made some biotechs more willing to consider terms they might have rejected a year ago. Turning Point is the 15th biotech company acquisition of 2022, slightly more than the 13 that had been announced by the same point last year, according to data compiled by BioPharma Dive.
In the case of Turning Point, though, dwindling funds were not a factor, as the company had just over $900 million in cash and marketable securities as of March 31, against $75 million in first quarter losses. Turning Point's cash holdings also help to lower the actual cost of the transaction for Bristol Myers to around $3.2 billion.
The acquisition comes two months after Turning Point announced data from a small study of repotrectinib in patients with non-small lung cancer. In 71 ROS1-positive patients never before treated with a targeted drug, repotrectinib shrank or eliminated tumors in 56, or 79%.
Roche’s Rozlytrek had a similar response rate of 74%, although without trials comparing the two directly it is unclear whether the results are as comparable as they appear.
Bristol Myers, in its announcement, pointed to how long patients on repotrectinib responded to treatment. In Turning Point’s study, 91% of patients who were enrolled for at least six months remained in response, compared with 75% for Rozlytrek. However, just 35 of the 71 patients in the repotrectinib study had reached the six-month milestone, so those data could change with further follow-up.
In making a multibillion-dollar offer, Bristol Myers is betting repotrectinib will outperform Rozlytrek and another drug in its class, Bayer’s Vitrakvi. Roche paid $1.7 billion for Ignyta, which discovered Rozlytrek, while Bayer licensed Vitrakvi for $400 million from the former Loxo Oncology — now part of Eli Lilly — in a deal that included up to $1.6 billion in total payments.
Rozlytrek had sales of 49 million Swiss francs, or $51 million last year, while Bayer didn’t report 2021 sales of Vitrakvi, which can be used broadly in solid tumors with a mutation called NTRK.
Bristol Myers’ offer “will surprise many investors that over the past year have begun to believe late-to-market targeted oncology drugs are likely to be commercial failures — even those with clinical data differentiation, like repotrectinib,” wrote Bradley Canino, an analyst with Stifel, in a June 3 note to clients.
Turning Point has four other clinical stage experimental drugs in its pipeline, three of which are targeted therapeutics that would compete with products that are already on the market.
The deal’s announcement gave a lift to other biotechs working in targeted oncology, like Blueprint Medicines, Black Diamond Therapeutics and Deciphera, which all saw their shares gain in value Friday. Shares in a widely followed biotech exchange traded fund that’s used as a barometer of the industry rose by 4% as well.
Editor's note: This story has been updated with additional details and commentary.