BMS To Acquire Medarex

In a move to strengthen development of its biologics portfolio, Bristol-Myers Squibb (BMS, New York) has agreed to acquire the biopharmaceutical company Medarex (Princeton, NJ) for $16 per share or approximately $2.4 billion. The deal includes $300 million in cash and marketable securities for a net purchase of $2.1 billion.

"Medarex's technology platform, people and pipeline provide a strong complement to our company's biologics strategy, specifically in immuno-oncology," said James M. Cornelius, chairman and chief executive officer, Bristol-Myers Squibb, in a Medarex and BMS press release. "With its productive and proven antibody discovery capabilities, ability to generate interesting therapeutic programs, and unique set of preclinical and clinical assets in development, Medarex represents what we're looking for in terms of our String of Pearls strategy. This acquisition is another important step in our BioPharma transformation."

Medarex is a developer of antibody technology and products, and BMS will gain assets in this field with the finalization of the acquisition. Medarex’s key drug candidate is ipilimumab, an immunotherapy in Phase III development for treating metastatic melanoma. The companies also have an ongoing Phase II study for ipilimumab in lung cancer as well as Phase III studies in adjuvant melanoma and hormone-refractory prostate cancer. BMS will also gain the rights to seven antibodies in clinical trials under Medarex's sole sponsorship, three other antibodies being codeveloped with other partners, and rights to preclinical assets in various stages of development by Medarex.

In addition to these drug candidates, BMS will gain technology for antibody development and antibody drug conjugation, with a key asset being Medarex's UltiMAb Human Antibody Development System, a technology platform for producing high-affinity, fully human antibodies. According to Medarex, three marketed antibodies-Simponi (golimumab), Stelara (ustekinumab), and Ilaris (canakinumab)–were developed using this technology, and BMS will gain royalites from the sales of these products. Simponi was developed by Johnson & Johnson’s (J&J, New Brunswick, NJ) Centocor Ortho Biotech, Stelara by J&J’s Janssen Ortho, and Ilaris (canakinumab) by Novartis (Basel, Switzerland).

Upon closing of the deal, Medarex will become a BMS subsidiary Medarex’s board of directors have agreed to the acquisition. The deal is subject to customary closings.

String-of-pearls strategy
The pending acquisition of Medarex is BMS’s eighth move as part of its “string-of-pearls strategy,” which refers to the company’s approach in making external alliances, partnerships, and acquisitions with small and large pharmaceutical companies as part of an overall goal of transforming itself into what BMS calls a “next-generation biopharma company.” The company announced that strategy in late 2007, which includes a restructuring and productivity initiative, as well as approaches in building its development capabilities and product portfolio in biologics and select small molecules. Since 2007, BMS has made seven moves as part of its string-of-pearls strategy. These deals are:

• Acquisition of Adnexus Therapeutics (Waltham, MA) in 2007, which provides BMS with a proprietary class of biologics called Adnectins, or proteins designed to either block or stimulate therapeutic targets of interest, and a proprietary protein engineering platform called PROfusion

• May 2008 agreement with KAI Pharmaceuticals (South San Francisco, CA) for the global development and commercialization of KAI-9803, an investigational medication for the emergency-room treatment of acute heart attack

• June 2008 acquisition of Kosan Biosciences (Hayward, CA), a company focused on cancer therapeutics, which includes a class of compounds called Hsp90 inhibitors

• August 2008 agreement with PDL BioPharma (Incline Valley, NV) for the global development and commercialization of elotuzumab, a potential first-in-class biologic for treating multiple myeloma

• December 2008 agreement with Exelixis (South San Francisco) for the global collaboration covering two cancer programs: an investigational anticancer compound in Phase III clinical development for medullary thyroid cancer and a compound in Phase I clinical development for treating advanced solid tumor malignancies

• January 2009 agreement with ZymoGenetics (Seattle) for PEG-interferon lambda, a novel interferon currently in Phase Ib clinical development for treating hepatitis C

• March 2009 global collaboration with Nissan Chemical Industries (Tokyo) and Teijin Pharma (Tokyo) for the development and commercialization of an investigational compound in Phase I clinical development in Japan for patients with atrial fibrillation.