(Reuters) – Bristol Myers Squibb Co said on Monday it would buy MyoKardia Inc for about $13 billion to bolster its portfolio of heart disease treatments, as it seeks to reduce some of its dependence on cancer drugs.
The deal follows Bristol Myers’ $74 billion acquisition of Celgene Corp last year that combined two of the world’s largest cancer drug businesses in the biggest pharmaceutical deal ever.
Shares of MyoKardia, which have nearly doubled in value this year, surged another 58.5% to $221.25 before the opening bell, just shy of Bristol Myers’ offer price of $225 per share.
With the deal, Bristol Myers gains mavacamten, an experimental heart disease therapy with blockbuster potential.
The drug is being tested for treating obstructive hypertrophic cardiomyopathy – a disease where a heart muscle thickens and obstructs blood flow. It affects up to 200,000 people across the United States and Europe.
“I think it is a typical acquisition premium for our sales expectations for mavacamten as we had estimates in the initial (and lowest risk) indication of obstructive hypertrophic cardiomyopathy of about $2.5 billion by 2026,” Wedbush analyst David Nierengarten said.
Brsitol Myers said the acquisition provides a “medium- and long-term growth driver” and will add to its earnings beginning in 2023, a year after its top-selling cancer drug Revlimid is expected to lose some of its patent exclusivity in the United States.
Sales of its blockbuster immunotherapy Opdivo have been eclipsed by Merck & Co’s Keytruda, which has received approvals to treat newly diagnosed forms of advanced lung cancer.
Myokardia is expected to submit a marketing application for mavacamten to the U.S. health regulator in the first quarter of 2021.
Bristol Myers said it expects to explore the use of mavacamten for other diseases and develop MyoKardia’s portfolio of experimental drugs.
Reporting by Manojna Maddipatla and Manas Mishra in Bengaluru; Editing by Saumyadeb Chakrabarty.
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Source: Reuters
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