Bristol Myers Squibb Remains Open to M&A Amid Industry Caution
As some major pharmaceutical companies slow down their merger and acquisition (M&A) activities, Bristol Myers Squibb (BMS) signals a continued interest in dealmaking. Following a series of high-profile acquisitions in 2023, BMS CEO Christopher Boerner affirmed the company’s readiness to pursue further deals if the right opportunities arise, leveraging its robust financial position.
BMS’s Strategic Approach to M&A
Speaking at Goldman Sachs’ 2024 Global Healthcare Conference, Boerner highlighted BMS’s disciplined approach to business development. “We’re going to be disciplined, and pay down the debt we accrued in doing the deals last year,” he said. “But with that in mind, as we look at opportunities, we’re focused on the therapeutic areas we’re in.”
In 2023, BMS executed several significant acquisitions, starting with the $5.8 billion purchase of Mirati Therapeutics, known for its KRAS inhibitors, in October. This was followed by a $14 billion acquisition of Karuna Therapeutics, which brought the promising schizophrenia candidate KarXT into BMS’s portfolio. The year ended with a $4.1 billion deal for RayzeBio, a radiopharmaceutical company.
“We need to make sure we execute against those deals,” Boerner emphasized at the event. He expressed confidence in the company’s progress, stating, “We closed both RayzeBio and Karuna relatively quickly. In terms of digesting those deals, I think we’re well down the path.”
Focus on Growth Areas
Boerner highlighted the strategic importance of KarXT, Karuna’s schizophrenia prospect, which is pending an FDA decision on September 26. He described it as a “critically important growth driver” and noted that while Karuna provided BMS with an immediate entry into the neuropsychology arena, there is still significant potential for expansion. “I think it’s fair to say that the company is a bit subscale in that space,” Boerner remarked. “And so that’s going to be an area of focus for us.”
RayzeBio, however, recently faced a setback when it had to temporarily halt enrollment in the late-stage ACTION-1 study of its lead radiotherapy candidate RYZ101 due to a shortage of the isotope actinium. Despite this, BMS remains optimistic about the potential of RayzeBio’s radiopharmaceutical pipeline.
Beyond neurology and oncology, BMS is exploring opportunities in cardiovascular disease and immunology. Boerner expressed excitement about the company’s prospective cell therapy CD19 NEX-T for autoimmune diseases like systemic lupus erythematosus. He emphasized the need for strategic capital allocation, focusing on business development that would drive growth in the latter half of the decade.
Contrasting Strategies in the Industry
Boerner’s comments came shortly after Pfizer CEO Albert Bourla, Ph.D., indicated a pause in his company’s major business development moves during the same Goldman Sachs event. Bourla explained that Pfizer needed a “breathing period” after significant acquisitions, including Arena Pharmaceuticals, Biohaven Pharma, Global Blood Therapeutics, and Seagen. He noted the importance of executing well on these existing deals to avoid disrupting Pfizer’s current operations.
Similarly, AstraZeneca’s CEO Pascal Soriot recently stated that his company would ease up on technology platform deals in the coming months. “I think we have acquired and built most of what we need for now and we need to execute on what we’ve got,” Soriot said during a recent earnings call. However, he clarified that business development activities would not come to a complete halt.
BMS’s Path Forward
Boerner’s remarks underscore BMS’s commitment to strategic growth through acquisitions, even as other industry leaders take a more cautious approach. The company’s robust balance sheet and focused strategy allow it to remain agile and ready to seize opportunities that align with its therapeutic goals.
BMS’s recent acquisitions have positioned it well for future growth, particularly in the neuropsychology and radiopharmaceutical sectors. As the company integrates these new assets and explores additional opportunities in cardiovascular disease and immunology, it remains a key player to watch in the pharmaceutical M&A landscape.
Boerner’s strategic vision for BMS highlights the importance of disciplined growth and the careful execution of acquisitions. As the pharmaceutical industry navigates a complex and evolving landscape, BMS’s approach could serve as a model for balancing risk and opportunity in business development.
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Source: Biospace