B-MS to become a biologics powerhouse with Medarex buy

Bristol-Myers Squibb is planning to acquire partner Medarex in a deal valued at $2.4 billion, giving it access to “proven antibody technology” and the full rights to a promising late-stage melanoma drug.

Under the terms of the deal, B-MS will pay $16.00 per share in cash, which represents a premium of 90.5% to Medarex's closing price last night of $8.40. The latter firm has $300 million in cash and marketable securities, so the purchase price is actually $2.1 billion.

For its money, B-MS is getting hold of Medarex’s UltiMAb antibody technology, which has produced compounds such as Johnson & Johnson and Schering-Plough's recently-approved arthritis drug Simponi (golimumab), Novartis' auto-inflammatory disorder treatment Ilaris (canakinumab) and J&J’s Stelara (ustekinumab) for psoriasis. B-MS will get royalties from these three drugs and the firm noted that it also gains Medarex’s next-generation Antibody-Drug Conjugate technology, which “could open new fields in oncology drug development”.

B-MS is also getting the rights to seven antibodies in clinical trials under Medarex’s sole sponsorship and three others being co-developed with partners. The deal also means that the New York-based major gets full ownership of ipilimumab, which is in Phase III for the treatment of metastatic melanoma. The companies also have an ongoing Phase II study in lung cancer as well as Phase III studies in adjuvant melanoma and hormone-refractory prostate cancer.

B-MS chief executive James Cornelius said that Medarex provides “a strong complement to our company’s biologics strategy, specifically in immuno-oncology.” Given its “productive and proven antibody discovery capabilities, ability to generate interesting therapeutic programmes” and clinical assets, the company “represents what we’re looking for in terms of our ‘string of pearls strategy',” he added, noting that the acquisition “is another important step in our biopharma transformation”.