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Bristol-Myers Squibb to acquire Celgene, Eli Lilly to acquire Loxo Oncology
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Several pharmaceutical companies announced acquisitions in January, including Bristol-Myers Squibb, which has agreed to acquire Celgene in one of the largest mergers in the pharmaceutical industry’s history, and Eli Lilly and Co., which has agreed to acquire Loxo Oncology Inc.
BMS-Celgene deal
The cash-and-stock deal between Bristol-Myers Squibb and Celgene — approved by both companies’ boards of directors — is valued at approximately $74 billion. The companies expect to complete the transaction in the third quarter of this year.
“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” Giovanni Caforio, MD, chairman and CEO of Bristol-Myers Squibb, said in a press release issued by the two companies. “As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation.
“We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches,” Caforio added. “Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.”
Under the agreement, Celgene shareholders will receive one Bristol-Myers Squibb share and $50 cash for each share of Celgene. Celgene shareholders also will receive one tradeable contingent value right for each Celgene share. Contingent value rights entitle holders to receive payment for achievement of future regulatory milestones, according to the press release.
Executives with both companies suggested the transaction will create a leading specialty biopharma company well-positioned to address the needs of patients with cancer, cardiovascular disease, and inflammatory and immunologic disease.
“Mergers between health care organizations are usually about gaining market share and, therefore, more negotiating power with payers and government,” Barbara Zabawa, JD, MPH, clinical assistant professor in the College of Health Sciences at University of Wisconsin-Milwaukee, told HemOnc Today. “This, of course, can lead to bigger profits.
“As a for-profit company, the boards of directors for these merging organizations have a fiduciary duty to the shareholders to ensure that the companies do well financially,” Zabawa added. “Combining assets and research resources may help with finding solutions faster because the organization has more resources to tap into, but it can also mean more lobbying power to get drugs approved that might not otherwise be approved.”
The combined company would have nine products with more than $1 billion in annual sales. The portfolio would consist of several key oncology therapeutics, including the PD-1 checkpoint inhibitor nivolumab (Opdivo, Bristol-Myers Squibb), the CTLA-4 immune checkpoint inhibitor ipilimumab (Yervoy, Bristol-Myers Squibb), and the immunomodulatory drugs lenalidomide (Revlimid, Celgene) and pomalidomide (Pomalyst, Celgene). Other key therapeutics include abatacept (Orencia, Bristol-Myers Squibb), apremilast (Otezla, Celgene) and apixaban (Eliquis; Bristol-Myers Squibb, Pfizer).
Near-term product launches would include four for hematology indications: luspatercept (ACE-536; Acceleron Pharma, Celgene), liso-cel (JCAR017; Juno Therapeutics/Celgene), bb2121 (Bluebird Bio and Celgene) and fedratinib (Celgene).
Once the deal is completed, Bristol-Myers Squibb shareholders are expected to own nearly 69% of the company and Celgene shareholders would own approximately 31%.
The cash-and-stock consideration for Celgene shareholders would be valued at $102.43 per share based on closing stock prices on Jan. 2, the day before the announcement.
Eli Lilly acquires Loxo Oncology
The deal for Eli Lilly to acquire Loxo Oncology is valued at about $8 billion.
Loxo Oncology has a pipeline of targeted anticancer agents — one of which is FDA approved — that focus on single gene abnormalities detected by genomic testing.
These agents include:
- LOXO-292, a first-in-class oral RET inhibitor that targets cancers with alterations to the rearranged during transfection (RET) kinase. RET fusions and mutations occur in many tumor types, including certain lung and thyroid cancers. The agent has received breakthrough therapy designation for three indications;
- LOXO-305, an oral inhibitor of Bruton tyrosine kinase — a molecular target found in many B-cell leukemias and lymphomas — that is under phase 1/phase 2 study;
- larotrectinib (Vitrakvi), a first-in-class oral TRK inhibitor that was developed in collaboration with Bayer and is the first treatment targeting a specific genetic abnormality to receive a tumor-agnostic indication at the time of initial FDA approval; and
- LOXO-195, a follow-on TRK inhibitor for acquired resistance to TRK inhibition.
“Using tailored medicines to target key tumor dependencies offers an increasingly robust approach to cancer treatment,” Daniel Skovronsky, MD, PhD, Eli Lilly’s chief scientific officer and president of Lilly Research Laboratories, said in a press release. “Loxo Oncology’s portfolio of RET, BTK and TRK inhibitors targeted specifically to patients with mutations or fusions in these genes, in combination with advanced diagnostics that allow us to know exactly which patients may benefit, creates new opportunities to improve the lives of people with advanced cancer.”
According to the agreement, Eli Lilly will acquire all outstanding shares of Loxo Oncology for $235 per share in cash, or approximately $8 billion. The tender offer — expected after the first quarter of 2019 — represents a premium of 68% to Loxo Oncology’s closing stock price on Jan. 4, the last trading day before the announcement.
“We are gratified that Lilly has recognized our contributions to the field of precision medicine and are excited to see our pipeline benefit from the resources and global reach of the Lilly organization,” Josh Bilenker, MD, CEO of Loxo Oncology, said in the release. “Tumor genomic profiling is becoming standard of care, and it will be critical to continue innovating against new targets, while anticipating mechanisms of resistance to available therapies, so that patients with advanced cancer have the chance to live longer and better lives.” – by Mark Leiser, John DeRosier and Alexandra Todak