Verity Healthcare

Bristol Myers Squibb is buying 2seventy bio, a deal that provides the pharmaceutical large full management over the partnered most cancers cell remedy Abecma as that product faces headwinds in a aggressive a number of myeloma market.

In keeping with deal phrases introduced Monday night time, BMS can pay $5 in money for every share of 2seventy. That represents a 78.5% premium to 2seventy’s closing inventory value on Monday, nevertheless it’s a far cry from the corporate’s $38 per share value when it debuted 4 years in the past. The deal values 2seventy at $286 million, or $102 million considering the money reserves it is going to convey to BMS.

Abecma is an autologous cell remedy that was initially developed by Bluebird Bio and was later partnered with BMS. In 2021, 2seventy spun out as a standalone, publicly traded firm, taking Bluebird’s most cancers cell therapies together with $442 million to help them. The spinout occurred months after Abecma turned the primary CAR T-therapy permitted for treating a number of myeloma. However that first mover benefit was quick lived, as companions Johnson & Johnson and Legend Biotech gained FDA approval in 2023 for Carvykti, a CAR T-therapy for a number of myeloma. In the meantime, provide chain constraints introduced BMS and 2seventy with manufacturing challenges for Abecma.

Final 12 months, the FDA expanded Abecma’s approval to incorporate third-line therapy of a number of myeloma, which expands the marketplace for the product. However that call was made alongside the expanded approval of Carvykti to second-line use in a number of myeloma. Regardless of this benefit, Carvykti is related to a motion dysfunction facet impact that has not been reported with Abecma.

Extra cell remedy competitors might be coming. Arcellx has Section 2 information displaying its CAR T-therapy, anito-cel, has efficacy similar to Carvykti and a security profile similar to Abecma. Anito-cell is being developed beneath a partnership partnered with Gilead Sciences, which brings its cell remedy expertise and manufacturing infrastructure.

BMS and 2seventy share equally within the income and losses from gross sales of Abecma within the U.S. The product generated $402 million in income in 2024, a 14% decline from gross sales within the prior 12 months, based on BMS’s annual report. Whereas gross sales all over the world are rising, within the U.S. — the biggest marketplace for Abecma — gross sales declined. BMS’s profit-sharing price final 12 months was $43 million. Within the fourth quarter of 2024, BMS recorded a $122 million impairment cost for Abecma “primarily ensuing from a decreased money circulation forecast because of the evolving aggressive panorama,” the annual report said. BMS mentioned this cost represented a full write-down of the asset.

Abecma is the lone remaining asset from 2seventy’s spinout from Bluebird. Final 12 months, 2seventy offered its preclinical and early scientific cell remedy pipeline to Regeneron Prescribed drugs, then offered hemophilia property to Novo Nordisk. These transactions adopted a company restructuring that minimize R&D bills and targeted the enterprise on commercialization of Abecma. In the meantime, Bluebird has struggled to commercialize its three FDA-approved gene therapies. Final month, Bluebird agreed to an acquisition that takes the cash-strapped firm non-public.

BMS’s 2seventy acquisition is anticipated to shut within the second quarter of this 12 months. In a be aware despatched to buyers Tuesday, Leerink Companions analyst Daina Graybosch wrote that the deal alerts modest confidence within the near-term revenue potential of Abecma. Additionally, buying the biotech spares BMS the duty of sharing income associated to the cell remedy. Graybosch famous that 2seventy CEO Chip Baird said at an investor convention final week that his firm’s transfer towards profitability makes it enticing to bigger corporations. However Graybosch mentioned it’s unlikely one other firm will step in with one other provide.

“Whereas we agree that Abecma will construct in profitability this 12 months, we additionally imagine the uncertainty in future income streams could be an overhang for any bigger firm contemplating an acquisition,” she mentioned. “We see little to no worth in 2seventy for any firm trying to construct a cell remedy enterprise, as 2seventy already divested its R&D property to Regeneron and Novo Nordisk, and [Bristol Myers Squibb] manufactures and commercializes Abecma.”

Photograph by Bristol Myers Squibb