Bristol-Myers Squibb has announced the purchase of Adnexus Therapeutics, a developer of biological drugs, for $430 million. BMS executives say the acquisition will help advance its portfolio in biological drugs across a number of key therapeutic areas, including oncology.

Central to the purchase was Adnexus' discovery of adnectins, a novel class of biologic. Most prominent among them is Angiocept, an anti-angiogenic drug that is currently in Phase I development.

BMS also gets its hands on PROfusion, Adnexus' proprietary protein

design engine, with which trillions of protein variations can be engineered

at one time. "Adnectins and the PROfusion technology are among the most exciting next generation biologics platforms currently in development," said Dr Elliott Sigal, executive vice president and chief scientific officer of BMS.

"By uniting Adnexus' innovation and discovery expertise with our internal

capabilities in oncology and other therapeutic areas, we intend to fuel the

company's biologic growth strategy and importantly, deliver innovative new

treatment options for patients."

Under the terms of the agreement Bristol-Myers Squibb will acquire Adnexus for a gross purchase price of $430 million, with the net purchase price being $415 million after deducting Adnexus' net cash balance at closing.

In addition, there is an earn-out structure that could result in Bristol-Myers Squibb paying an additional amount of approximately $75 million, in three increments of approximately $25 million each, in the event certain development and regulatory milestones are achieved. The closing of

the transaction is subject to customary regulatory approvals.

"Bringing Adnexus into the Bristol-Myers Squibb family builds upon a

successful and productive collaboration between the two companies in

oncology and is an important step in accelerating the strategic

transformation of our pharmaceutical business to a biopharma business

model," said Jim Cornelius, chief executive officer, Bristol-Myers Squibb.

Dr John Mendlein, CEO of Adnexus, said: "We have enjoyed a highly productive and collaborative relationship to date, and look forward to helping Bristol-Myers Squibb advance its innovative pipeline." Adnexus Therapeutics will become a subsidiary of Bristol-Myers Squibb and

remain based in Waltham, Massachusetts.

In July, BMS sales crept up just 1% to $4.9 billion during the second quarter of this year. Net income rose more impressively, however, at 6% to $726 million as the firm was helped by the receding threat of generic Plavix (clopidogrel) in the US supply chain.

However, as with many of its compatriots in major pharma, BMS also announced "comprehensive cost reduction programmes" - including job cuts in some areas - in a bid to drive sales and earnings growth.