Why is Bristol Myers Squibb Investing $13.1 Billion in MyoKardia?

Hypertrophic cardiomyopathy (HCM) is a chronic condition that makes it difficult for the heart to pump blood due to the thickening of the heart walls. An obstructive and most common form of the disorder causes thickening of the walls that separate the heart’s bottom two chambers. So far, there are no targeted therapies available for the problem. The only way to treat this condition is by relieving the symptoms using beta-blockers and calcium channel blockers.

In 2012, MyoKardia, a clinical-stage pharmaceutical company, started working on this problem. The company is working on novel therapies that address the condition by treating the disease’s underlying biomechanical cause. Its myosin modulator drug, Mavacamten, could significantly improve oxygen uptake along with other symptoms and, most importantly, reduce or eliminate obstruction of the left ventricle-the factor that leads to all the problems.

Acquisition by Pharma Giant

Looking at the potential of the treatment and a vision to expand its cardio portfolio, Bristol-Myers Squibb announced earlier today about the acquisition of MyoKardia. BMS is offering $13.1 billion in cash for MyoKardia’s heart therapies. Under the terms of the agreement, BMS will acquire MyoKardia’s common stock for $225 per share in cash. If all goes well, the transaction will be closed during the fourth quarter of 2020. Myokardia’s shares rose as much as 59% today in the premarket on the arrival of the news.

With this deal, BMS will be adding Mavacamten along with other clinical-stage compounds from MyoKardia’s pipeline, including danicamtiv and MYK-224, into its shiny portfolio. While Mavacamten’s NDA is ready for submission to the FDA next year, other drugs are still being tested in the clinical trials. Danicamtiv is being developed for systolic heart failure and MYK-224 for HCM.

“The acquisition of MyoKardia further strengthens our portfolio, pipeline, and scientific capabilities, and is expected to add a meaningful medium- and long-term growth driver,” said Giovanni Caforio, M.D., Board Chair and Chief Executive Officer of Bristol Myers Squibb. “We are further strengthening our outstanding cardiovascular franchise through the addition of mavacamten, a promising medicine with the potential to address a significant unmet medical need in patients with cardiovascular disease.

Focus Shift from Oncology

This deal comes as a surprise to those who know BMS as an oncology-focused company. Last year, it acquired the business of another oncology company Celgene Corp., making people believe that perhaps the company is expanding its established oncology business further. However, this deal with MyoKardia is not so surprising after all, given BMS’s shiny portfolio of cardio drugs and their earnings. The company boasts of an outstanding cardiovascular franchise, which, according to an estimate made by Forbes, accounted for around 28% of the value in 2019.

While the company’s revenue from heart drugs dropped from $8 billion in 2011 to nearly $635 million in 2013 as its two bestseller cardio drugs lost to generic competition, it regained its share in the cardio market arrival of blood thinner Eliquis. The drug is currently approved in the US and European markets for the treatment of Deep Vein Thrombosis, venous thromboembolic events, and Pulmonary Embolism. It is believed that BMS’s revenue would keep going up as the company’s blood thinner, Eliquis, remains a hit with the cardiologists.

The addition of MyoKardia’s cardiology pipeline is important for BMS to emerge as a strong player in the cardio market and reduce dependency on oncology drugs for its revenue. The company’s oncology drug, Revlimid, inherited from Celgene, is expected to lose U.S. patent exclusivity in 2027. With this, the company would also start losing a big share of the market as generics take over. In this scenario, having new drugs to support the company’s growth in the future is important.

Editor: Rajaneesh K. Gopinath, Ph.D.

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References

1. https://news.bms.com/news/corporate-financial/2020/Bristol-Myers-Squibb-to-Acquire-MyoKardia-for-13.1-Billion-in-Cash/default.aspx
2. https://www.forbes.com/sites/greatspeculations/2018/07/05/a-look-at-bristol-myers-squibbs-cardiovascular-drugs-segment/#2508bd6c3231

Author

Ruchi Jhonsa