AAA Big Deal: Bristol-Myers Squibb tunes into IFM

Big Deal: Bristol-Myers Squibb tunes into IFM

Biopharmaceutical company Bristol-Myers Squibb (BMS) agreed on Friday to acquire US-based immuno-oncology therapy developer IFM Therapeutics in a deal that could reach $2.3bn, its fourth big-money acquisition of a corporate-backed company in as many years.

BMS will pay $300m in cash for IFM, which counts pharmaceutical firm Novartis among its investors, and up to $1.01bn in milestone payments for each of the first products that come out of the company’s two preclinical antagonist programs. IFM’s shareholders could potentially receive extra payments if other drugs emerge from those programs.

Founded in 2015, IFM is developing small-molecule drugs that will treat cancer as well as autoimmunity and inflammatory disorders by modulating specific targets in a patient’s immune system in order to help it fight off the disease.

Novartis participated in the startup’s only publicly disclosed funding, a $27m series A round in June 2016 that was co-led by venture capital firms Atlas Venture and Abingworth at an undisclosed valuation.

BMS will take control of IMS’s STING (stimulator of interferon genes) and NLRP3 agonist development programs through the deal. The former includes a lead immuno-oncology asset while the latter has what BMS referred to as a potential first-in-class pipeline candidate.

Thomas J. Lynch, Jr, chief scientific officer, of BMS, said: “Targeting innate immunity pathways represents a potentially differentiated approach in immuno-oncology designed to initiate and augment immune responses that may help the body’s natural defences better recognise and attack tumours.

“The addition of STING and NLRP3 agonist programs broadens our ability to investigate additional pathways across the immune system and complements our immuno-oncology portfolio. We look forward to advancing the development of these important programs initiated by (co-founder and CEO) Gary Glick, his leadership team and leading academic and industry experts across immunology and oncology.”

Once the deal is closed, IFM’s team will form a new company that will also be known as IFM Therapeutics, and which will concentrate on developing antagonists that will treat inflammatory diseases and fibrosis. However, the acquisition will involve BMS acquiring all its outstanding shares, meaning Novartis and other investors will still generate a full return.

The transaction, which is expected to close in the current financial quarter, is the fourth time BMS has acquired a corporate-backed life sciences company in the past four years, beginning with its purchase of neurodegenerative disease drug developer iPierian in 2014.

The deal involved an upfront payment of $175m and up to $550m in future milestone payments, and came after iPierian had raised approximately $66m in funding from investors including GV, the corporate venturing unit then known as Google Ventures, and SR One, the strategic investment arm of pharmaceutical company GlaxoSmithKline.

BMS paid $800m for small-molecule oncology treatment developer Flexus Biosciences in early 2015, with up to $450m in milestone payments to come, giving an exit to pharmaceutical firm Celgene, which together with Kleiner Perkins Caufield & Byers and Column Group had helped Flexus raise $38m since it was founded.

Finally, the firm paid $225m in cash for autoimmune disease therapy startup Padlock Therapeutics in a March 2016 deal that could eventually reach $600m should all milestone payments be made. Padlock had received $23m in a 2014 series A round led by Atlas Venture that included pharmaceutical companies Johnson & Johnson and Merck Group, which invested through subsidiaries MS Ventures and Johnson & Johnson Development Corporation respectively.

BMS has in that time acquired three other companies – monoclonal antibody developer Cormorant Pharmaceuticals, galectin modulator developer Galecto Biotech and cardiovascular therapy developer Cardioxyl Pharmaceuticals – without corporate backers.

Despite it having invested in Blade Therapeutics and Cardior Pharmaceuticals in the past 18 months, the firm is not an active participant in venture capital, especially when compared to many of its peers, but corporate venturers need exits too, and in its way BMS fills an important slot in the life sciences investment ecosystem.

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