By Manas Mishra and Amruta Khandekar
(Reuters) -Bristol Myers Squibb Co said on Friday it will acquire drug developer Turning Point Therapeutics Inc for $4.1 billion in cash to help bolster its arsenal of cancer drugs.
Turning Point’s lead drug, repotrectinib, targets mutations in certain proteins in the body that lead to unchecked cell growth.
Bristol Myers will pay $76 per Turning Point share, a 122.5% premium to its last closing price.
The deal comes at a time when a dearth of large acquisitions, clinical failures and investor exits following a gradual easing of the pandemic have hammered biotech stocks.
Wall Street analysts said the deal could help lift sector sentiment.
The deal “will surprise many investors who over the past year have begun to believe late-to-market targeted oncology drugs are likely to be commercial failures,” Stifel analyst Bradley Canino said.
Turning Point’s shares, which have fallen roughly 28% this year, more than doubled to $73.60 in early trading.
Repotrectinib belongs to a class of treatments known as tyrosine kinase inhibitors, and is being tested to treat non-small cell lung cancer (NSCLC) and other advanced solid tumors.
However, the drug, if approved, will compete in a crowded market for lung cancer treatments and contend for market share with Bristol Myers’ own drug Opdivo, and other cancer drugs made by Roche, Merck & Co Inc and AstraZeneca.
Bristol Myers said it expects repotrectinib to become a standard-of-care therapy for certain patients with NSCLC, a lucrative market for drug developers, when it is approved.
Sales of Bristol Myers’ Opdivo have fallen below those of rival Merck’s blockbuster treatment, Keytruda.
Bristol Myers expects U.S. approval for repotrectinib in the second half of 2023.
(Reporting by Manas Mishra and Amruta Khandekar in Bengaluru; Editing by Maju Samuel and Shounak Dasgupta)
