This Analyst Thinks Blueprint Medicines' Non-Dilutive Funding 'Deflates M&A Speculation'

  • Today Blueprint Medicines Corp BPMC announced strategic financing agreements with Sixth Street and Royalty Pharma Plc RPRX for up to $1.25 billion, including $575 million upfront upon deal closure.
  • SVB Securities thinks the terms of the deals are fairly valued on the Sixth Street portion and favorable for Blueprint Medicines on the Royalty Pharma portion.
  • "In addition, these deals provide non-dilutive capital and independent validation by sophisticated investors, although we think this is largely counterbalanced by what may be perceived as deflating the likelihood of near-term strategic optionality for the company," the analyst writes.
  • As per the analysis, the Sixth Street Ayvakit deal is relatively neutral at first glance, but additional debt could make the deal less attractive.
  • For Royalty Pharma, SVB believes the transaction appears favorable for Blueprint Medicines.
  • "We think most investors did not view BPMC as having a short cash runway or needing financing...Therefore, we think that the impact on near-term strategic optionality, at a time when several acquisitions have been announced, and the bid/asks appear to be aligning, may disappoint some investors hoping for a larger transaction," the analyst notes.
  • Price Action: BPMC shares are down 0.90% at $51.74 during the market session on the last check Thursday.

Posted In: BriefsAnalyst ColorBiotechNewsHealth CareFinancingOfferingsAnalyst RatingsGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.