Bristol Myers Squibb has struck a deal to acquire MyoKardia for $13.1 billion. The all-cash takeover will see Bristol Myers pay a 61% premium to MyoKardia’s closing price on Friday to secure a heart disease drug that is nearing a filing for approval.
MyoKardia put itself on course for an approval filing in May when it presented top-line phase 3 data on myosin inhibitor mavacamten in obstructive hypertrophic cardiomyopathy (HCM), a disease that can lead to cardiac dysfunction. A subsequent, more detailed analysis revealed there were twice as many responders in the mavacamten arm as in the placebo cohort.
The data persuaded Bristol Myers that mavacamten is a worthy addition to a cardiovascular portfolio spearheaded by oral anticoagulant Eliquis. Bristol Myers’ willingness to pay a hefty premium to buy MyoKardia reflects a belief that mavacamten can be a significant growth driver in the medium to long term.
With MyoKardia planning to file for FDA approval of mavacamten in the first quarter of 2021, there is potential for the drug to start generating sales fairly soon. The size of the opportunity will increase as Bristol Myers works with MyoKardia to expand use of mavacamten beyond obstructive HCM.
Bristol Myers sees scope to develop mavacamten in non-obstructive HCM and other indications. In outlining how it plans to go after the opportunities, Bristol Myers highlighted the value of the talent and capabilities it is acquiring from MyoKardia. The combined company will also take MyoKardia’s two other clinical candidates, MYK-491 and MYK-224, and earlier-stage assets forward.
Sanofi pumped $230 million into the development of mavacamten and MYK-491 from 2014 to 2018, only to let its agreement lapse at the end of that period. MyoKardia went on to buy back U.S. royalty rights from Sanofi for $80 million in July 2019, severing the French pharma’s remaining ties to its two drugs.
Bristol Myers, with the benefit of having seen phase 3 data that came out after Sanofi split, has put a far higher value on MyoKardia and its programs. The valuation is underpinned by the potential for MyoKardia to have a blockbuster market to itself. The FDA is yet to approve a treatment for HCM, and there is little chance of another company getting there ahead of MyoKardia, with an academic phase 2 of Novartis’ Entresto and a phase 1 of Celltrion’s CT-G20 the next most advanced programs.
To pay for the deal, Bristol Myers will use some of the $20 billion in cash and equivalents it had as of the end of June. The growing size of the cash pile drew the attention of analysts, who questioned Bristol Myers about its use of capital on a quarterly results conference call in August. Bristol Myers CEO Giovanni Caforio said the company was “very active” in looking for takeover targets.