Bristol-Myers Squibb Company BMY has entered into a definitive agreement with clinical-stage biopharmaceutical company, MyoKardia MYOK in a bid to acquire the latter for $225 per share in cash or a total value of $13.1 billion. The deal is expected to close in the fourth quarter of 2020 and approved by the boards of directors of both companies.

Per the agreement, a subsidiary of Bristol Myers will begin a tender offer to acquire all the outstanding shares of MyoKardia’s common stock. Following the successful closing of the tender offer, Bristol Myers will acquire all the remaining shares of MyoKardia that are not proposed in the tender offer through a second-step merger at the same price of $225 per share.

The transaction is subject to customary closing conditions and the termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The deal, if successful, will strengthen Bristol Myers’ cardiovascular franchise as MyoKardia develops targeted therapies for the treatment of serious cardiovascular diseases.

MyoKardia’s lead therapeutic candidate mavacamten, a potential first-in-class cardiovascular medicine, is being developed for the treatment of obstructive hypertrophic cardiomyopathy (HCM). A new drug application for mavacamten to treat obstructive HCM is expected to be filed in the first quarter of 2021 in the United States.

With this acquisition, Bristol Myers will add mavacamten to its portfolio and explore the full potential of the same for additional indications, such as non-obstructive HCM. The company will also gain MyoKardia’s two clinical-stage novel therapies, namely danicamtiv and MYK-224 developed for cardiovascular treatment.

Shares of Bristol Myers have declined 8.5% so far this year compared with the industry’s decrease of 3%.

We note that Bristol-Myers is highly active on the acquisition front. The company is looking to counter the generic threat to its key drugs through deal wins and is also introducing products to enhance its portfolio.

In August 2020, Bristol Myers announced a definitive deal with privately-held, clinical-stage biopharmaceutical company Forbius for TGF-beta assets. Meanwhile, in November 2019, Bristol Myers acquired Celgene Corporation for a whopping $74 billion to boost its oncology franchise.

Zacks Rank & Stocks to Consider

Bristol Myers currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Ligand Pharmaceuticals Incorporated LGND and Horizon Therapeutics Public Limited Company HZNP, both presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings estimates have been revised 8.1% upward for 2020 and 81.8% for 2021 over the past 60 days.

Horizon Therapeutics’ earnings estimates have moved 43% north for 2020 and 42.3% for 2021 over the past 60 days. The stock has skyrocketed 120.5% year to date.

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Bristol Myers Squibb Company (BMY): Free Stock Analysis Report

Horizon Therapeutics Public Limited Company (HZNP): Free Stock Analysis Report

Ligand Pharmaceuticals Incorporated (LGND): Free Stock Analysis Report

MyoKardia, Inc. (MYOK): Free Stock Analysis Report

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