(Reuters) -Bristol-Myers Squibb said on Friday that it would buy drug developer Turning Point Therapeutics (NASDAQ:TPTX) Inc for $4.1 billion in cash to get access to promising targeted treatments for cancer.
The main drug made by Turning Point is called repotrectinib. It works by going after mutations in certain proteins in the body that cause uncontrolled cell growth, which is a sign of cancer.
When the drug is approved, Bristol Myers (NYSE:BMY) thinks it will be a stand-alone treatment for some people with non-small cell lung cancer. This is a lucrative market for drug developers.
Repotrectinib, which is in a group of medicines called tyrosine kinase inhibitors, is being tested as a way to treat advanced solid tumours and non-small cell lung cancer.
“The purchase of Turning Point Therapeutics adds a best-in-class late-stage precision oncology asset to our leading oncology franchise,” said Giovanni Cafori, CEO of Bristol-Myers.
Sales of Bristol Myers’ own cancer drug, Opdivo, have dropped below those of Keytruda, a best-seller made by a competitor.
Bristol-Myers will pay $76 for each share of Turning Point, which is a 122.5 percent increase over the last closing price.
Bristol Myers thinks that the FDA will approve repotrectinib in the U.S. in the second half of 2023.
Before the deal was announced, Turning Point’s shares were down about 28% in 2022. This was because the biotech industry as a whole was in a slump after a period of rapid growth in 2020 and the first half of 2021.
This year, there haven’t been many deals in the sector, so Pfizer (NYSE:PFE) bought Biohaven Pharmaceutical for $11.6 billion in May. At the time, Wall Street analysts were hopeful that the deal would lead to more buyouts.