Bristol Myers Squibb (BMS) is set to make a substantial entry into the field of cancer drug development with its planned acquisition of California-based Mirati Therapeutics. The pharmaceutical giant is prepared to pay up to $5.8 billion for Mirati.
The acquisition will grant BMS access to several assets, with the crown jewel being Krazati, an FDA-approved non-small cell lung cancer (NSCLC) drug. Krazati is hailed by both companies as the best-in-class KRAS G12C inhibitor, offering promise in the treatment of NSCLC.
In addition to the immediate equity value of $4.8 billion, the deal includes a contingent value right term. This component of the deal commits to paying Mirati shareholders $1 billion contingent on the FDA’s acceptance of an application for MRTX1719, a pipeline drug aimed at NSCLC patients who have undergone no more than two prior lines of therapy within seven years of the deal’s closure.
The transaction is anticipated to be finalized by the first half of the upcoming year, indicating BMS’s swift action in securing its footing in the market.
This acquisition is a strategic response to BMS’s existing portfolio challenges. In the second quarter, the company had to revise its 2023 sales projection, downgrading it from a 2% increase to a low-single-digit decline, owing to the underperformance of its top-selling drugs—Eliquis, Revlimid, and Opdivo. Furthermore, the impending loss of patent protection for these products has created urgency for BMS to diversify revenue streams and reinforce its drug pipeline.
Before the Mirati acquisition, BMS primarily concentrated on immuno-oncology within its solid tumor franchise. With this strategic move, the company aims to diversify its offerings and bolster its position in the oncology market.
Krazati, in particular, has demonstrated its potential by receiving FDA accelerated approval in December 2022 for treating previously treated KRAS G12C-mutant NSCLC. In the first half of 2023, the drug generated sales of $19.7 million, capturing more than 40% of new patient starts.
Mirati has also disclosed its plans for a phase 3 trial involving a combination of Krazati and Merck & Co.’s Keytruda, targeting newly diagnosed NSCLC patients with high tumor PD-L1 expression levels.
The acquisition of Mirati opens up multiple possibilities for combination therapies, by combining BMS’s immunotherapies with Mirati’s targeted drugs. This synergy may offer Krazati an edge over rival drugs such as Amgen’s Lumakras, particularly due to differences in liver toxicity profiles.
While both KRAS inhibitors have received accelerated approvals, recent developments may tip the scales in Krazati’s favor. A panel of FDA-invited experts raised doubts about the interpretability of Lumakras’ confirmatory trial, potentially giving Krazati a competitive edge.
The confirmation of Krazati’s efficacy is expected through the KRYSTAL-12 trial, set to conclude early next year. Unlike Lumakras, this study does not appear to suffer from design issues.
However, there are potential long-term rivals in the KRAS G12C inhibitor arena, including Roche’s divarasib, Eli Lilly’s LY3537982, and Revolution Medicines’ RMC-6291. These alternatives pose a challenge to Krazati’s market dominance.
Regarding MRTX1719, a PRMT5 inhibitor, it is scheduled to enter phase 2 testing in the first half of 2024. This drug targets MATP-deleted tumors, which constitute about 10% of cancers. Here, Mirati will face competition from Amgen, which is also developing AMG 193 for these tumors.