Bristol Myers strikes $4.1 billion RayzeBio deal for targeted cancer therapies

By Bhanvi Satija

(Reuters) -Bristol Myers Squibb said on Tuesday it would buy RayzeBio for about $4.1 billion to bolster its cancer drug business, marking the second multi-billion dollar deal struck by the drugmaker in less than a week.

Bristol Myers had also announced a $14 billion buyout of schizophrenia drug developer Karuna Therapeutics on Friday, nearly two months after newly-appointed CEO Chris Boerner officially took the helm at the drugmaker.

Both deals come as sales of Bristol Myers’ top drugs, blood cancer treatment Revlimid and blood thinner Eliquis, take a hit from generic competition while other older therapies face loss of patent protection later this decade.

With the RayzeBio deal, Bristol gains a late-stage targeted radiopharma therapy designed to kill cancer cells by delivering radioactive particles to the tumurous tissue or tumor-associated cells. The drug, called RYZ101 by RayzeBio, is being tested to treat a rare type of pancreatic cancer.

The RayzeBio acquisition “further strengthens our growth opportunities in the back half of the decade and beyond,” Boerner said.

Bristol also gains access to RayzeBio’s manufacturing site in Indianapolis, Indiana for radiopharmaceutical compounds, which is currently under construction.

Bristol said it will pay $62.50 for each share of RayzeBio in cash, representing a premium of 104% to the stock’s last close.

RayzeBio shares, which had risen 27% since their market debut in September, more than doubled to $61.53 in early trading.

Bristol’s deal adds to a spree of acquisitions in the biotech sector in recent weeks.

AbbVie has struck two multi-billion dollar deals since November, while AstraZeneca on Tuesday said it will buy China’s Gracell Biotechnologies for up to $1.2 billion.

Eli Lilly in October struck a $1.4 billion deal to buy Point Biopharma, gaining access to two late-stage radiopharmaceutical therapies.

(Reporting by Bhanvi Satija in Bengaluru; Editing by Krishna Chandra Eluri)