Mirati Therapeutics, a San Diego biotechnology company developing commercial drugs for cancer treatment, was just purchased by a pharmaceutical giant for more than $4.8 billion.
Bristol Myers Squibb, one of the world’s largest pharmaceutical companies, announced Sunday evening that it will buy Mirati for $58 per share in a deal funded by cash and debt. There is potential for an additional $1 billion in milestone payments.
The deal is expected to close in the first half of next year.
“Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster, and deliver on our vision of unlocking the science behind the promise of a life beyond cancer,” said Charles Baum, founder and CEO of Mirati Therapeutics, in a statement.
This acquisition is part of Bristol Myers Squibb’s broader effort to expand its cancer treatment portfolio. It picks up Mirati’s commercial non-small cell lung cancer drug Krazati, which was approved by the U.S. Food and Drug istration in December.
In the first half of this year, Krazati brought in $19.7 million in revenue, according to the company’s quarterly report. The addition of this commercial drug builds on Bristol Myers Squibb’s expansion into targeted cancer therapies beyond its current offerings of immunotherapies.
Mirati marks the second San Diego biotech snatched up by Bristol Myers Squibb recently for its oncology portfolio. Last year, it bought Turning Point Therapeutics for $4.1 billion to acquire its treatments that target lung cancer and mutations that cause cancer.
Mirati Therapeutics has been in San Diego developing treatments targeted at the genetic and immunological causes of cancer for 28 years. The biotech employed 593 people at the end of last year.
In addition to Krazati, Bristol Myers Squibb gains access to Mirati’s pipeline of potential treatments for lung, bile duct and skin cancer tumors, as well as tumor mutations in pancreatic, lung and colorectal cancers.
“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” said Giovanni Caforio, CEO of Bristol Myers Squibb, in a statement. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.”
A Bristol Myers Squibb spokesperson told the Union-Tribune that the two companies will continue to operate independently until the deal closes. Over the coming weeks, both management teams “will work together to determine how best to bring our companies together and capitalize on the strengths and talent across each organization.”
Mirati’s acquisition does not come as a complete surprise. Last week, rumors were swirling after Bloomberg reported that a French pharmaceutical company, Sanofi, might buy Mirati.
Following the news of Bristol Myers Squibb’s purchase, Mirati’s shares closed Monday at $57.02, down $3.18 on the Nasdaq exchange. The transaction will be dilutive to Bristol Myers Squibb, according to the announcement.
