Bristol Myers Squibb has inked a deal to buy San Diego's Turning Point Therapeutics for $4.1 billion in cash, strengthening the pharmaceutical giant's presence in precision cancer treatments.
Shareholders of Turning Point, which went public three years ago at $18 per share, will get $76 per share under terms of the transaction.
While that's a hefty gain from the IPO, it's still well below Turning Point's peak share price of $135.90 in February 2021.
Since then, investors have aggressively sold the biotech stocks, slashing valuations for many young firms that went public in the past few years. Before Bristol's offer on Friday, Turning Point's shares ended trading Thursday at $34.16.
Turning Point's top drug candidate, repotrectinib, has the potential to be a best-in-class tyrosine kinase inhibitor targeting drivers of non-small cell lung cancer and other advanced solid tumors, according to Bristol.
It would diversify Bristol's roster of immunotherapy-based cancer treatments. BMS also develops autoimmune and neurodegenerative disease treatments where few therapies are available, the company said.
Repotrectinib has showed positive results in ongoing clinical trials. It has received three Breakthrough Therapy Designations by the U.S. Food and Drug Administration. Bristol Myers expects approval for repotrectinib in the U.S. in 2023.
"With repotrectinib, we have the opportunity to change the standard of care and address a significant unmet medical need for ROS-1-positive non-small cell lung cancer patients," said Samit Hirawat, chief medical officer for Global Drug Development at Bristol, in a statement.
Turning Point has four additional drug candidates in its development pipeline.
Bristol Myers already has a large footprint in San Diego. It employs about 450 workers in the region, many of whom it brought over with its acquisition of Celgene three years ago.
Earlier this year, Bristol Myers committed to lease a 427,000 square foot campus in University City — expanding its lab and office space in the region by 30 percent. The new campus is scheduled to open in the second half of 2025.
Turning Point employs 250 workers. Before the acquisition, it committed to lease 185,000 square feet of lab and office space in San Diego — an increase from its current 68,500 square feet. The new lease was set to commence in May 2023.
A Bristol Myers Squibb spokesperson said it's too early to say what will happen with Turning Point's pending lease or whether the acquisition will result in layoffs.
"What we can tell you is that we look forward to working with the talented scientists and staff at Turning Point Therapeutics and anticipate sharing more information in the future," the company said in an email. "It's important to note that San Diego continues to be an important research hub for BMS and we have a long-term commitment to continued investment."
Both the Bristol Myers Squibb and Turning Point boards of directors unanimously approved the transaction. It's expected to be completed this fall.
"Since our founding, we have leveraged our deep scientific expertise to develop a pipeline of promising precision oncology assets," said Dr. Athena Countouriotis, chief executive of Turning Point, in a statement. "With Bristol Myers Squibb's leadership in oncology, strong commercial capabilities and manufacturing footprint, we will be able to further accelerate the pace at which we can bring our novel medicines to benefit people diagnosed with cancer around the world."
Turning Point's shares surged 118 percent on Friday to close at $74.59 on the Nasdaq Exchange.
