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.
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