Anatomy of a deal: How MyoKardia got BMS to bump up its buyout to $13B

People shaking hands across a desk that has computer and papers on it
The companies engaged in a back-and-forth where MyoKardia CEO Tassos Gianakakos repeatedly asked for an “improved proposal,” and Bristol Myers Squibb CEO Giovanni Caforio, M.D., kept upping the company's bid. (rawpixel/Pixabay)

MyoKardia wasn’t looking for a buyout when it started discussing potential partnerships with Bristol Myers Squibb last year. But when the Big Pharma came knocking in September to ink a quick acquisition, the biotech’s executives made sure they wrung as much as they could out of the deal.

Early partnering discussions between the two focused on danicamtiv, MyoKardia’s midphase heart failure drug, rather than its lead program, mavacamten, a cardiomyopathy med poised for an FDA filing early next year. But in April this year, BMS upped the ante with a request to broaden to talks beyond danicamtiv, according to a securities filing.

In July, MyoKardia presented its pipeline to BMS, while BMS laid out its capabilities, as well as a potential global partnership. The next month, MyoKardia revealed updated phase 3 data for mavacamten at the European Society of Cardiology’s virtual annual meeting, which—it appears—inspired the Big Pharma to go all out.

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RELATED: Bristol Myers strikes $13B MyoKardia buyout to gain heart drug

On Sept. 2, Bristol Myers CEO Giovanni Caforio , M.D., called MyoKardia CEO Tassos Gianakakos with an offer to buy all outstanding shares of MyoKardia at $185 apiece, in cash. Gianakakos replied that MyoKardia’s plan didn’t include a sale, but that he’d check with his board. He didn’t have much time—BMS’ proposal would expire on Sept. 30, Caforio said in a letter laying out the offer.

That set off a back-and-forth, where Gianakakos repeatedly asked for an “improved proposal,” and Caforio kept increasing Bristol Myers’ bid. The board was expecting “additional value,” Gianakakos said, according to the filing, noting “MyoKardia’s potential as a stand-alone company and the expectation that the price would reflect such potential.”

Caforio upped the offer from $185 per share to $210, then to $220, eventually landing at $225. Along the way, he kept pointing to the first week of October as the target signing date, according to the filing.

In late September, MyoKardia’s board decided that the $225 offer was “in the best interests” of the company and its shareholders, and the duo inked the merger agreement on Oct. 3, right on schedule. The $13.1 billion acquisition will see BMS pay a 61% premium over MyoKardia’s closing price on Oct. 2 of $139.60.

RELATED: Anatomy of a deal: How Merck closed Immune Design for $300M

MyoKardia’s leadership team is picking up a premium, too—Gianakakos himself is exiting the deal with $1.6 million in severance and bonus pay, as well as $80.6 million in equity awards, according to the filing. The rest of the C-suite isn’t doing too shabby either, with Chief Business Officer Jake Bauer, Chief Scientific Officer Robert McDowell, Ph.D., and Chief Financial Officer Taylor Harris each leaving with more than $600,000 in severance and bonus pay. All three of them, plus Chief Commercial Officer William Fairey, each exit with more than $20 million in equity awards.

The deal is slated to close in the fourth quarter.

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