MRTX - Bristol-Myers is spending $5.8 billion to buy Mirati Therapeutics

2023-10-09 13:04:02 ET

Bristol-Myers Squibb Co (NYSE: BMY) has decided to spend up to $5.8 billion to acquire Mirati Therapeutics Inc (NASDAQ: MRTX). Shares of both companies are in the red at writing.

Bristol-Myers will get to expand its footprint in oncology

The all-cash transaction values each share of the oncology therapies company at $58 – close to 4.0% below their previous close.

Bristol-Myers will add Krazati – an FDA approved treatment for a type of lung cancer to its portfolio with this acquisition. Chris Boerner – its Chief Executive-Elect said in a press release today:

Mirati is another step forward in our efforts to grow our diversified oncology portfolio and further strengthen Bristol Myers’ pipeline for the latter half of the decade and beyond.

The pharmaceutical behemoth expects to close this deal next year in the first half, provided that it satisfied customary closing conditions, including shareholders’ approval.

Bristol-Mirati deal may eventually be valued at $70 a share

Bristol-Myers expects this merger with the biotech firm to dilute its adjusted per-share earnings by 35 cents in the first year after completing the transaction.

The multinational is scheduled to report its Q3 results in the final week of October. Consensus is for it to earn $1.79 a share this quarter versus $1.99 per share a year ago.

The definitive agreement announced this morning also offers one Contingent Value Right (non-tradeable) for each share of Mirati Therapeutics “potentially worth $12 per share in cash”, as per the press release.

Bristol-Myers had also bought Turning Point Therapeutics – another cancer biotech company last year for a total cash consideration of $4.1 billion.

The post Bristol-Myers is spending $5.8 billion to buy Mirati Therapeutics appeared first on Invezz.