Bristol-Myers Squibb Beefs Up Cardiology Franchise With $13.1B Deal To Buy Myokardia

Pharma giant Bristol-Myers Squibb Co BMY is bulking up, as the company announced a multi-billion dollar deal to buy cardio-focused biopharma Myokardia Inc MYOK.

Deal Terms: Bristol-Myers Squibb announced Monday a definitive agreement to buy Myokardia for $225 per share, or $13.1 billion, in cash.

The per-share deal value represented a 61.18% premium to Myokardia's closing price Friday.

Bristol-Myers said it would finance the deal through a combination of cash and debt. As of June 30, 2020, the company's cash and cash equivalents stood at $19.93 billion, and along with marketable debt securities, the balance was $22.2 billion.

The deal has been approved by boards of both companies. The transaction is expected to close in the fourth quarter of 2020.

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Deal Logic: Myokardia would bring into Bristol-Myers Squibb's stable mavacamten, a late-stage clinical asset in development for the treatment of obstructive hypertrophic cardiomyopathy, or HCM. Myokardia has planned to submit an NDA for mavacamtem to the FDA in the first quarter of 2021.

Bristol-Myers Squibb said it plans to explore the full potential of mavacamten in additional indications such as non-obstructive HCM, and also develop Myokardia's other promising pipeline compounds, including danicamtiv and MYK-224.

"We are further strengthening our outstanding cardiovascular franchise through the addition of mavacamten, a promising medicine with the potential to address a significant unmet medical need in patients with cardiovascular disease," said Giovanni Caforia, CEO of Bristol-Myers Squibb.

Bristol-Myers Squibb's cardiovascular portfolio currently includes Eliquis, an oral anticoagulant. The deal would give this oncology-heavy company the much-needed diversification.

Further, the deal is expected to minimally dilutive to Bristol-Myers Squibb's non-GAAP EPS in 2021 and 2022, and be accretive beginning in 2023.

The company also affirmed its 2021 non-GAAP EPS guidance.

In pre-market trading, Myokardia shares were jumping 58.13% to $220.75, while Bristol-Myers Squibb shares were edging down 0.46% to $58.45.

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