© Reuters. FILE PHOTO: Test tubes are seen in front of a displayed Bristol Myers Squibb logo in this illustration taken, May 21, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Bristol-Myers Squibb on Sunday said it will acquire Mirati Therapeutics (NASDAQ:) in a transaction that values the cancer drugmaker at up to $5.8 billion.
The company said that it will buy Mirati for $58 per share in cash.
Mirati stockholders will receive one non-tradeable contingent value right for each Mirati share held, potentially worth $12.00 per share in cash, representing an additional $1 billion of value opportunity, the company added.
Bristol-Myers Squibb (NYSE:) will finance the transaction with a combination of cash and debt, the company said in a statement.
The transaction will help grow Bristol-Myers’s oncology franchise with the addition of Mirati’s lung cancer drug Krazati.
The U.S. health regulator had in December approved the drug to treat adults with advanced lung cancer.
“With multiple targeted oncology assets including Krazati, Mirati is another important step forward in our efforts to grow our diversified oncology portfolio and further strengthen Bristol Myers Squibb’s pipeline for the latter half of the decade and beyond,” said Chris Boerner, Bristol-Myers’ incoming CEO.
The New York-based company has been pressured by declining demand for two of its top drugs, the blood cancer treatment Revlimid and blood thinner Eliquis, which face generic competition.
Bristol is buying Mirati at a time when the shares are considerably cheaper than they were. Mirati’s shares touched a 52-week high of $101.3 apiece on Nov. 28 and are now trading at $60.2.
The transaction is expected to be dilutive to Bristol-Myers Squibb’s non-GAAP earnings per share by approximately 35 cents per share in the first 12 months after the transaction closes, the statement added.
In April, Bristol-Myers said CEO Giovanni Caforio would step down in November and be succeeded by Boerner, the company’s chief commercialization officer.
Last year, Bristol-Myers acquired drug developer Turning Point Therapeutics (NASDAQ:) for $4.1 billion in cash to help bolster its arsenal of cancer drugs.
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