Bristol Myers Squibb to acquire RayzeBio for $4.1 billion in cash

American multinational pharmaceutical company Bristol Myers Squibb on Tuesday said it would buy RayzeBio for about $4.1 billion to bolster its cancer drug business, marking its second major acquisition in less than a week.

Under the definitive merger agreement, announced on Tuesday, Bristol Myers Squibb will acquire RayzeBio for $62.50 per share in cash, for a total equity value of approximately $4.1 billion.

The share transaction represents a premium of 104 per cent to the stock's last close.

The transaction, which was unanimously approved by the boards of both Bristol Myers Squibb and RayzeBio, comes day after Bristol Myers’s $14 billion buyout of schizophrenia drug maker Karuna Therapeutics.

The acquisition of RayzeBio gives Bristol Myers access to a late-stage targeted radiopharma therapy, RYZ101, that can shoot down cancer cells by delivering radioactive particles to the tumorous tissue.

The company also gains access to RayzeBio's manufacturing site in Indianapolis, Indiana.

RayzeBio is a clinical-stage radiopharmaceutical therapeutics company with an innovation-leading position in actinium-based RPTs and a pipeline of potentially first-in-class and best-in-class drug development programmes. Its current pipeline includes drugs targeting the treatment of solid tumors, including gastroenteropancreatic neuroendocrine tumors, small cell lung cancer, hepatocellular carcinoma and other cancers. 

Actinium-based RPTs offer potential advantages over currently available RPTs since the high potency and short firing range of the alpha-emitter create the possibility for stronger efficacy and more targeted delivery.

“Acquiring RayzeBio’s differentiated actinium-based radiopharmaceutical platform will establish Bristol Myers Squibb’s presence in one of the most promising and fastest-growing new modalities for the treatment of patients with solid tumors – delivering radioactive payloads to cancer cells in a targeted manner,” said Samit Hirawat, executive vice president and chief medical officer of drug development at Bristol Myers Squibb.

 “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,”  Ken Song, president and CEO of RayzeBio, said.

Bristol Myers Squibb, which has a well-established presence in oncology and deep expertise in developing, commercialising and manufacturing treatments on a global scale, sees RayzeBio as an ideal partner.

The transaction is expected to result in an addition of approximately $9.13 per share in the combined company’s non-GAAP diluted earnings in 2024. Bristol Myers Squibb expects to finance the acquisition with primarily new debt issuance. 

The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including the tender of a majority of the outstanding shares of RayzeBio’s common stock and the expiration or termination of the waiting period, the company stated in a regulatory filing.