Bristol Myers Squibb's Acquisition of Mirati Therapeutics Valued at Up to $5.8 Billion

 

Bristol Myers Squibb's Acquisition of Mirati Therapeutics Valued at Up to $5.8 Billion

Bristol Myers Squibb Co. has made a significant announcement regarding its acquisition of Mirati Therapeutics Inc., a deal valued at up to a staggering $5.8 billion.

In this monumental agreement, the pharmaceutical giant is set to purchase Mirati at a price of $58 per share, thereby establishing a total equity value amounting to $4.8 billion. Additionally, Mirati stockholders will be entitled to receive a non-tradeable Contingent Value Right for each share they possess, potentially adding an extra $12 per share in cash. This contingent aspect of the deal has the potential to deliver an additional $1 billion in value.

As of the close of trading on Friday, Mirati's stock was valued at $60.20, resulting in a market capitalization of approximately $4.21 billion.

Mirati Therapeutics specializes in the development of commercial-stage oncology therapies, and through this acquisition, Bristol Myers Squibb will augment its portfolio with valuable assets, including the lung-cancer medication, Krazati, among others.

Giovanni Caforio, the Chief Executive and Chairman of Bristol Myers Squibb, expressed enthusiasm about this development, stating, "We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients. With a strong strategic fit, great science, and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals."

It's important to note that this deal is expected to have a dilutive impact on Bristol Myers Squibb's non-GAAP earnings per share, reducing them by approximately 35 cents per share within the first 12 months following the completion of the transaction. The merger itself is anticipated to conclude by the first half of 2024.

Currently, Bristol Myers Squibb boasts a market capitalization of around $118.4 billion, though its shares have seen a decline of 21% year-to-date. In contrast, Mirati's shares have performed more favorably, with a 33% increase in value over the course of the year. The S&P 500 index, for comparison, has registered a gain of roughly 12% in the year 2023.