NEW YORK – Bristol Myers Squibb said on Sunday that it is acquiring Mirati Therapeutics for $58.00 per share in cash in a deal representing $4.8 billion in equity value.
The acquisition will bring Mirati's targeted oncology agents, including the KRAS inhibitor Krazati (adagrasib), into BMS's product portfolio. The US Food and Drug Administration approved Krazati in December as a treatment for previously treated advanced non-small cell lung cancer patients whose tumors harbor KRAS G12C mutations. San Diego-based Mirati is also developing Krazati with an immune checkpoint inhibitor as a first-line treatment for KRAS G12C-mutated NSCLC as well as in various other indications.
Beyond Krazati, Mirati has been developing MRTX1133, which is designed to target tumors with the KRAS G12D mutation, and MRTX0902, a SOS1 inhibitor that could be combined with agents targeting the MAPK/RAS pathway such as Krazati. The drugmaker has also been studying MRTX1719, a PRMT5/MTA inhibitor, in multiple MTAP-deleted tumor types, including NSCLC, cholangiocarcinoma, and melanoma. This agent is expected to enter Phase II trials during the first half of 2024.
Under the terms of the deal expected to close in the first half of 2024, Mirati stockholders will each receive a non-tradable contingent value right for each Mirati share, which they can cash in for a one-time payment of $12.00. This will add $1.0 billion in value to the deal, if within seven years of the acquisition the FDA accepts a new drug application seeking approval for MRTX1719 as a therapy for previously treated advanced NSCLC patients.
"Mirati strengthens and complements our current portfolio by adding assets focused on intrinsic tumor targets in the MTAP and MAPK pathways," Samit Hirawat, chief medical officer and head of global drug development at BMS, said in a statement. "We believe Mirati's assets have the potential to change the standard of care in multiple cancers, both as standalone therapies and in combination with BMS's existing pipeline."
In a statement, BMS noted that acquiring Mirati will likely have a $.35 dilutive effect on its non-GAAP EPS within the first year following the acquisition.
Market analysts believe the acquisition is largely based on the value the KRAS inhibitor may add to BMS's revenues, especially given recent indications that Mirati's drug might have an advantage over its primary competitor, Amgen's Lumakras (sotorasib). Last week, advisers to the FDA voted that due to potential bias in the confirmatory CodeBreaK 200 trial, they could not reliably conclude that Lumakras improved NSCLC patients' progression-free survival compared to docetaxel.
"Amgen's struggles with [CodeBreaK 200] have undoubtedly created an opportunity for Krazati assuming positive results from the confirmatory Phase III KRYSTAL-12 in early 2024, supporting full approval in the US and Europe," analysts from William Blair wrote in a note to investors on Monday. They further noted that Krazati might have efficacy advantages over Lumakras when combined with standard-of-care treatments.
Despite Amgen's recent struggles with CodeBreaK 200, the KRAS inhibitor market is a crowded one, with Novartis, Roche, Merck, Revolution Medicines, Eli Lilly, and Boehringer Ingelheim all advancing drugs in this class.
The boards of directors at both BMS and Mirati have unanimously approved the transaction. Evercore and Morgan Stanley are BMS's financial advisers on the deal, and Centerview Partners is serving as financial adviser to Mirati. Kirkland & Ellis is BMS's legal counsel, and Skadden, Arps, Slate, Meagher & Flom is Mirati's.