Turning Point Therapeutics snagged a $4.1 billion offer from Bristol Myers Squibb on Friday, and TPTX stock more than doubled.
The deal adds repotrectinib to Bristol Myers' wheelhouse. Repotrectinib is a potential treatment for lung cancer patients with a specific genetic mutation. It's expected to launch next year.
Wedbush analyst David Nierengarten says the deal could be a positive for the broader cancer space and for similar small/mid-cap biotechs like Blueprint Medicines, Cogent Biosciences, Kinnate Biopharma and Theseus Pharmaceuticals.
"While it's unclear if Bristol Myers' acquisition of Turning Point is a sign of more deals to come in targeted oncology, we believe it could mark the ending of the recent biotech bear market," he said.
On today's stock market, TPTX stock rocketed 118.4% higher to 74.59. Bristol Myers stock rose a fraction to 75.17. Shares of Zai Lab, which has exclusive rights to develop and sell repotrectinib in China, popped 5.9% to 30.39.
TPTX Stock Grabs Major Premium
Under the terms of the deal, Bristol Myers will pay 76 per share of Turning Point stock — a 122% premium to Thursday's closing price. The deal is an all-cash offer and both boards of directors have already signed off on it. Bristol Myers plans to wrap the transaction in the third quarter.
Bristol Myers expects the transaction to have an up to 8-cent impact on adjusted earnings in 2022. But the company says the deal will be accretive to profit beginning in 2025. Bristol Myers expects to finance the transaction with cash on hand.
"The acquisition of Turning Point Therapeutics further broadens our leading oncology franchise by adding a best-in-class, late-stage precision oncology asset," Bristol Myers Chief Executive Giovanni Caforio said in a written statement.
The news sent TPTX stock to its highest point since October. It also pushed shares well above their 200-day moving average for the first time since March 2021, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
