Bristol Myers Squibb has announced that it has entered into a definitive merger agreement with cancer-focused biotech Mirati Therapeutics in a bid to grow its oncology franchise. BMS is paying $58.00 per Mirati share in cash for a total deal value of $4.8B, which the pharmaceutical giant expects to finance through a combination of cash and debt.
The purchase price represents a 52% premium to Mirati’s 30-day volume-weighted average price as of market close on Oct. 4. However, it is about $2.00 lower on a per-share basis than Mirati’s closing price, following rumors of a potential deal with Sanofi.
The acquisition agreement with BMS will also give each Mirati stockholder one non-tradeable contingent value right (CVR) for every share they hold. This will entitle them to potentially $12.00 per share in cash, for an additional value opportunity of approximately $1 billion, which is contingent on the FDA accepting the New Drug Application for Mirati’s candidate MRTX1719 within seven years of the acquisition.