BMS to Acquire RayzeBio for $4.1 Billion, a 104% Premium, Bolstering Its Radiopharmaceutical Pipeline

The acquisition price is more than 104% higher than RayzeBio's closing price of $30.57 last Friday. The acquisition is expected to be completed in the first half of 2024.

Through this acquisition, BMS will gain RayzeBio's differentiated radiopharmaceutical technology platform based on α-emitters and several innovative pipeline products, including RYZ101, RYZ801, and other novel targeted radiopharmaceuticals, significantly enriching its oncology portfolio.

RayzeBio, Inc. is a Phase III biotechnology company developing radiopharmaceutical therapies for cancer. Established in 2020, the company is headquartered in California, USA. In September this year, RayzeBio went public on NASDAQ, raising a total of $311 million and ranking among the top IPOs in the global innovative drug sector in 2023.

The company's projects aim to treat solid tumors, with indications covering gastroenteropancreatic neuroendocrine tumors (GEP-NET), small cell lung cancer (SCLC), liver cancer, renal cancer, and more.

There is still a need for more effective treatments in the field of solid tumor therapy. RayzeBio utilizes targeted radionuclides (such as Actinium-225) to improve the prognosis of cancer patients, considering Radiopharmaceutical Therapy (RPT) as one of the most promising new approaches for treating solid tumors. This means that the same drug conjugate can be used for either diagnostic imaging or therapeutic purposes by switching the radionuclide.

Radiopharmaceutical therapy drugs bind to tumor cells, delivering targeted radiation to induce cancer cell death. Actinide radiopharmaceutical therapy has potential advantages over existing radiopharmaceutical therapies, as the high potency and short range of α-emitters create stronger efficacy and more precise delivery possibilities.

RayzeBio Product Pipeline

RayzeBio boasts a rich and differentiated product pipeline. Its lead project, RYZ101, is the most advanced, currently in Phase III clinical trials for the treatment of SSTR-positive GEP-NET patients, with the ES-SCLC indication having entered Phase I clinical stage. RYZ101 is an RDC targeting somatostatin receptor 2 (SSTR2), which is overexpressed in GEP-NETs and extensive-stage small cell lung cancer (ES-SCLC).
Currently, a Phase III clinical trial is recruiting patients to evaluate RYZ101 for the treatment of SSTR-positive GEP NETs patients who have previously received lutetium-177-based somatostatin therapy. RayzeBio previously reported interim results from the Phase 1b ACTION-1 clinical trial, indicating encouraging efficacy and tolerability. A Phase 1b clinical trial is also currently enrolling patients to assess RYZ101 as a first-line treatment in combination with standard of care for ES-SCLC.
RYZ801 is a novel patented peptide targeting glypican-3 (GPC3) developed by RayzeBio for delivering actinium-based radiopharmaceutical therapy to treat hepatocellular carcinoma. RYZ801 is currently in IND-enabling studies.
In addition, the pipeline includes an asset targeting CA9, which is expressed in renal cell carcinoma and is currently in IND-enabling studies. Multiple first-in-class solid tumor assets are in preclinical stages.

Since the beginning of this year, BMS has been particularly active in the market, acquiring Mirati, a KRAS star company, for $48 billion, repurchasing Mavacamten from LianBio for $350 million, acquiring Orum, a South Korean ADC company, and last year, acquiring Turning Point for $4.1 billion.

Not only that, but this radiopharmaceutical acquisition is the second major deal announced by Bristol-Myers Squibb (BMS) within a week. Just five days prior, on December 22, BMS announced a cash acquisition of Karuna Therapeutics at $330.00 per share, valuing the total equity at $14 billion, representing a premium of approximately 53.4% over the closing share price on December 21, 2023.

Karuna is a biopharmaceutical company dedicated to discovering, developing, and delivering transformative medicines for people with psychiatric and neurological disorders. Karuna's lead asset, KarXT (xanomeline trospium), is an antipsychotic drug with a novel mechanism of action (MoA) and distinct efficacy and safety profiles. Karuna’s New Drug Application (NDA) for KarXT in the treatment of schizophrenia in adults has been accepted by the FDA for review, with a PDUFA date set for September 26, 2024. KarXT is also in registrational trials as an adjunctive treatment to existing standard-of-care therapies for schizophrenia and for the treatment of psychosis in patients with Alzheimer’s disease.

BMS believes that KarXT represents a significant revenue contribution opportunity. BMS also recognizes the potential of Karuna’s early-stage and preclinical pipeline. This transaction further strengthens BMS's neuroscience portfolio.

This nuclear medicine acquisition is also BMS's third major acquisition this year, following the $4.8 billion acquisition of Mirati and the $14 billion acquisition of Karuna Therapeutics. All these acquisitions will lay a solid foundation for BMS to maintain continuous growth after its Opdivo loses patent protection in the future.

More than two months ago, Christopher Boerner was promoted to CEO of Bristol-Myers Squibb as the company faced a transitional period with its pipeline, caught between the old and the new. The third-quarter report showed that the company's global sales reached $11 billion, a 2% decrease year-over-year. Therefore, Bristol-Myers Squibb must continuously enrich its pipeline and accelerate efforts to find its next flagship product.

"This transaction further strengthens our increasingly diversified oncology portfolio by introducing a differentiated platform and pipeline, enhancing our growth opportunities for the coming years and beyond," said Christopher Boerner, CEO of Bristol Myers Squibb.

In the 1950s, Abbott launched the first commercial radiopharmaceutical, 131I Human Serum Albumin (RISA), paving the way for radiopharmaceuticals to enter the medical market, thus initiating the rise of the global radiopharmaceuticals market.

In recent years, as multinational pharmaceutical companies such as Bayer and Novartis have entered the field of nuclear medicine, the nuclear medicine industry has been thrust into the spotlight and placed on a "fast track," with massive mergers and acquisitions occurring frequently and the market being highly active.

According to incomplete statistics, as of November 2023, there have been 18 financing events in the global radiopharmaceuticals field this year, with a total financing amount exceeding 6 billion US dollars. MNCs such as Novartis, Eli Lilly, and Johnson & Johnson are also continuously expanding their radiopharmaceuticals footprint through mergers and acquisitions or equity investments.

Among them, Novartis quickly built up a radioligand therapy technology platform through acquisitions and owns two blockbuster products, Lutathera and Pluvicto, securing the leading position in RDC. Lutathera was approved by the FDA in January 2018 for the treatment of somatostatin receptor-positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs) and is the world's first marketed RDC. Pluvicto was approved by the FDA in March 2022 for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC) who are PSMA-positive and have previously received ARPI and taxane chemotherapy. Pluvicto is highly anticipated by Novartis and is expected to become the first RDC to join the billion-dollar molecular club. Additionally, Novartis has several products under development, including 177Lu-FAP-2286, 177Lu-NeoBOMB1, and 225Ac-PSMA-617.

Bayer entered the nuclear medicine field relatively early, launching Xofigo a decade ago, followed by significant acquisitions of Algeta, Noria, and PSMA Therapeutics to further strengthen its RDC portfolio. It has now become one of the pioneers and leaders in this track. At a recent R&D day meeting, Bayer introduced that the company currently has 7 RDCs in preclinical stages and 2 in early clinical stages (BAY 3546828, BAY 3563254) under development.

Lilly Recently Completed a Nuclear Medicine Acquisition Worth Up to $1.4 Billion. On October 3, Lilly announced an agreement with nuclear medicine company POINT Biopharma to acquire the latter at a price of $12.50 per share, representing a 68% premium. Through this transaction, Lilly gained access to multiple RDCs, including two late-stage clinical candidates, PNT2002 and PNT2031, POINT's next-generation radioligand therapy technology platform, and the corresponding nuclear medicine supply chain.

Not only that, in the Chinese market, domestic companies such as Dongcheng Pharmaceutical, China Isotope & Radiation Corporation, Hengrui Medicine, Grand Pharmaceutical, and Xiantong Pharmaceutical are all accelerating their布局.

Nuclear medicine has the advantages of precise targeting, powerful killing, limited damage, and integrated diagnosis and treatment, and has become the next important wave of innovation in the field of cancer treatment. Pharmaceutical companies in China will also accelerate innovation to meet the huge unmet clinical needs.