Bristol Myers Squibb Expands Oncology Line with $4.1 Billion RayzeBio Acquisition

In a bold move to enhance its oncology portfolio, Bristol Myers Squibb  has announced the acquisition of RayzeBio, for approximately $4.1 billion. This acquisition marks BMS's second major deal in less than a week, following its $14 billion buyout of Karuna Therapeutics, a schizophrenia drug developer.

Bristol Myers Squibb (BMS) has acquired RayzeBio for $4.1 billion to bolster its oncology portfolio, integrating RayzeBio's advanced radiopharmaceutical platform and its lead program, RYZ101. This strategic move, a component of BMS's aggressive expansion strategy, includes acquiring a state-of-the-art manufacturing facility in Indiana. The recent acquisitions, including the RayzeBio deal, highlight the pharmaceutical giant's bold shift towards diversifying and strengthening its product offerings, especially in the field of oncology.

The RayzeBio acquisition brings with it a premier actinium-based radiopharmaceutical platform, notably their lead program, RYZ101, which is in Phase 3 development for treating gastroenteropancreatic neuroendocrine tumors (GEP-NETs) and shows promise for small cell lung cancer and other solid tumors.

Chris Boerner, CEO of Bristol Myers Squibb, emphasized the significance of this transaction in boosting their oncology portfolio. He noted “This transaction enhances our increasingly diversified oncology portfolio by bringing a differentiated platform and pipeline, and further strengthens our growth opportunities in the back half of the decade and beyond. Radiopharmaceutical therapeutics are already transforming cancer care, and RayzeBio is at the forefront of pioneering the application of this novel modality.”

The deal, unanimously approved by both companies' Boards of Directors, will see Bristol Myers Squibb commence a tender offer to acquire all outstanding shares of RayzeBio at $62.50 per share in cash. This price represents a significant premium over RayzeBio's last closing stock price and values the equity at approximately $4.1 billion, or $3.6 billion net of estimated cash acquired.

Dr. Ken Song, President and CEO of RayzeBio, also expressed optimism about the merger, citing the potential of radiopharmaceutical therapeutics in addressing the urgent need for more effective treatments in solid tumors. He said, “Despite therapeutic advances in recent years, the need for more effective treatments in solid tumors persists, and radiopharmaceutical therapeutics are positioned to be an important next wave of innovation in oncology therapy. Bristol Myers Squibb’s well-established presence in oncology and deep expertise in developing, commercializing and manufacturing treatments on a global scale makes it the ideal partner for RayzeBio.”

In addition to RYZ101, the acquisition brings several promising assets to BMS, including RYZ801 for hepatocellular carcinoma and multiple first-in-class preclinical assets for solid tumors. Furthermore, RayzeBio is nearing completion of a state-of-the-art manufacturing facility in Indianapolis, Indiana, poised to start GMP drug production in early 2024.

The transaction, expected to close in the first half of 2024, is subject to customary closing conditions, including the tender of a majority of RayzeBio’s common stock. Bristol Myers Squibb plans to finance the acquisition primarily through new debt issuance, reflecting its strong financial profile and commitment to maintaining robust investment-grade credit ratings. Analysts view these recent acquisitions as a strategic response to the looming patent expiries of some of BMS's older therapies.