Bristol Myers Squibb and Mirati Therapeutics recently announced that they have entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Mirati for $58 per share in cash, for a total equity value of $4.8 billion. Mirati stockholders will also receive one non-tradeable Contingent Value Right (CVR) for each Mirati share held, potentially worth $12 per share in cash, representing an additional $1 billion of value opportunity. The deal was unanimously approved by both the Bristol Myers Squibb and the Mirati Boards of Directors.
Mirati is a commercial-stage targeted oncology company whose goal is to discover, design, and deliver breakthrough therapies to transform the lives of patients with cancer and their loved ones. Mirati’s assets are a strong fit with Bristol Myers Squibb’s portfolio and innovative pipeline and represent an attractive opportunity to grow Bristol Myers Squibb’s oncology franchise. And through this acquisition, Bristol Myers Squibb will add KRAZATI, a critical lung cancer medicine, to its commercial portfolio. The company also gains access to several promising clinical assets that complement its oncology pipeline and are strong candidates for single agent development and combination strategies.
Mirati’s portfolio includes:
1.) KRAZATI (adagrasib), which was granted accelerated U.S. Food and Drug Administration (FDA) approval for the treatment of adult patients with KRASG12C-mutated locally advanced or metastatic Non-Small Cell Lung Cancer (NSCLC) – who have received at least one prior systemic therapy. And KRASG12C mutations represent one of the most frequent alterations in NSCLC, accounting for about 14% of all NSCLC patients. KRAZATI also has several attributes that position it favorably compared to other KRASG12C inhibitors, including its long half-life and its demonstrated ability to be combined with a PD-1 inhibitor in the first-line treatment of NSCLC in Phase 1 and 2 clinical trials. Adagrasib has shown central nervous system (CNS) penetration and intracranial responses in patients with active and untreated brain metastases. Plus, it has shown strong efficacy data as a second- and third-line treatment for patients with colorectal cancer in combination with cetuximab, and as a monotherapy in previously treated pancreatic ductal adenocarcinoma. There are plans underway to work with regulators to bring adagrasib to patients in these treatment settings in the near future;
2.) MRTX1719, a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase 1 development, has highlighted encouraging early efficacy data across several tumor types with MTAP deletion, including NSCLC, cholangiocarcinoma (bile duct cancer) and melanoma, with no evidence to date of meaningful hematologic toxicities associated with non-selective PRMT5 inhibitors. MRTX1719 also targets MTAP-deleted tumors that comprise approximately 10% of all cancers. Phase 2 clinical trial initiation for MRTX1719 is expected in the first half of 2024;
3.) A leading KRAS and KRAS enabling program, including MRTX1133 and MRTX0902. And MRTX1133 targets the KRASG12D mutation, which is implicated in key tumor types, such as pancreatic cancer, NSCLC and colorectal cancer. MRTX0902 is a SOS1 inhibitor in Phase 1 clinical development with the potential for combination use with other products targeting the MAPK/RAS pathway, which includes KRAZATI. The KRASG12D mutation is implicated in over 30% of pancreatic cancer patients, a disease with high unmet medical needs.
The deal 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 $0.35 per share in the first 12 months after the transaction closes.
Under the terms of the merger, Bristol Myers Squibb through a subsidiary will acquire all of the outstanding shares of Mirati common stock at a price of $58.00 per share in cash representing a 52% premium to the 30-day VWAP as of the unaffected October 4, 2023 close, for a total equity value of $4.8 billion corresponding to an enterprise value of approximately $3.7 billion – which accounts for approximately $1.1 billion of Mirati cash. And each Mirati stockholder will also receive one non-tradeable CVR per Mirati share, which will entitle its holder to receive a one-time potential payment of $12 in cash, for a total value of approximately $1 billion, upon acceptance by U.S. FDA of a new drug application for MRTX1719 for the treatment of either locally advanced or metastatic NSCLC in patients who have received no more than two prior lines of systemic therapy within seven years after the closing of the merger, subject to the terms and conditions contained in a contingent value rights agreement detailing the terms of the CVR.
The deal is anticipated to close by the first half of 2024, subject to fulfillment of customary closing conditions, including approval of Mirati’s stockholders and receipt of required regulatory approvals.
Bristol Myers Squibb expects to finance the deal with cash and debt.
KEY QUOTES:
“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients. With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.”
– Giovanni Caforio, Chief Executive Officer and Board Chair, Bristol Myers Squibb
“With multiple targeted oncology assets including KRAZATI, Mirati is another important step forward in our efforts to grow our diversified oncology portfolio and further strengthen Bristol Myers Squibb’s pipeline for the latter half of the decade and beyond. Today’s news builds upon our long legacy of delivering breakthrough therapies that transform the lives of people with cancer. We are impressed with the science that the talented people of Mirati have driven in service of patients, and we look forward to welcoming them to Bristol Myers Squibb.”
– Chris Boerner, Ph.D., Executive Vice President and Chief Operating Officer and Chief Executive Officer-Elect, Bristol Myers Squibb
“Mirati strengthens and complements our current portfolio by adding assets focused on intrinsic tumor targets in the MTAP and MAPK pathways. We believe Mirati’s assets have the potential to change the standard of care in multiple cancers, both as standalone therapies and in combination with Bristol Myers Squibb’s existing pipeline. We are excited about the significant potential that this transaction creates to transform patients’ lives through science around the world.”
– Samit Hirawat, M.D., Chief Medical Officer and Head of Global Drug Development, Bristol Myers Squibb
“Since our founding 10 years ago, Mirati has made significant strides in transforming the lives of patients living with cancer through the development of innovative therapies. Through our discovery and development of next-generation targeted cancer therapeutics, we have built a robust pipeline of potentially best-in-class treatments that offer renewed hope for patients. This transaction is a testament to the potential of our platform and to our team’s hard work and dedication to changing lives. Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster, and deliver on our vision of unlocking the science behind the promise of a life beyond cancer. We believe that this transaction is the best way to benefit patients and maximize value for shareholders.”
– Charles Baum, M.D., Ph.D., Founder, President and Chief Executive Officer, Mirati Therapeutics
