(Reuters) -Bristol Myers Squibb said on Friday it would acquire drug developer Turning Point Therapeutics Inc for $4.1 billion in cash to gain access to promising targeted treatments for cancer.
Turning Point’s lead drug, repotrectinib, targets mutations in certain proteins in the body that lead to unchecked cell growth, a hallmark of cancer.
Bristol Myers will pay $76 per Turning Point share, a 122.5% premium to its last closing price.
Turning Point’s shares, which have fallen roughly 28% this year along with a broader slump in the biotech sector, more than doubled to $73.79 before the bell.
Bristol Myers said it expects repotrectinib to become a standard-of-care therapy for certain patients with non-small cell lung cancer, a lucrative market for drug developers, when it is approved.
Repotrectinib, which belong to a class of treatments known as tyrosine kinase inhibitors, is being tested to treat non-small cell lung cancer and other advanced solid tumors.
“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 Officer Giovanni Caforio said.
Sales of Bristol Myers’ own lung cancer drug Opdivo have fallen below those of rival Merck’s blockbuster treatment, Keytruda.
Bristol Myers expects repotrectinib to be approved in the United States in the second half of 2023.
Following a dearth of deals in the sector this year, Pfizer in May agreed to an $11.6 billion deal to buy migraine drug developer Biohaven Pharmaceutical. The deal at that time kindled hopes among Wall Street analysts that it may usher in more buyouts.
(Reporting by Manas Mishra in Bengaluru; Editing by Maju Samuel)