Where Bristol-Myers Squibb Co (NYSE:BMY) Is Betting $520 Million

Andy Parker
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Where Bristol-Myers Squibb Co (NYSE:BMY) Is Betting $520 Million

Bristol-Myers Squibb Co (NYSE:BMY) has agreed to acquire privately-held Cormorant Pharmaceuticals. Boards on both sides and shareholders on the side of Cormorant have approved the buyout. But what is BMY getting in the acquisition and what is the cost of the deal?

Full rights to HuMax-IL8

First, Cormorant is a Swedish drug company whose primary focus is on developing cancer therapies that can be used in more effective combination treatment. The company has a lead drug candidate in Phase 1/2 called HuMax-IL8. Therefore, the acquisition will give BMY full rights to the promising candidate HuMax-IL8.

The reason HuMax-IL8 is a promising cancer therapy is that it is an antibody treatment that is designed to target a protein called interleukin-8 (IL-8). The protein is expressed in many solid tumors and it is believed to hinder immune response. As such, it is considered a stumbling block in the in the treatment of tumors.

That being the case, HuMax-IL8 can be used to attack IL-8 and potentially counteract its effect of suppressing immune responses. By attacking IL-8, HuMax-IL8 can help increase the efficacy of many existing cancer drugs in combination regimen. It is HuMax-IL8’s reverse the effects of IL-8 protein that makes it an interesting candidate for Bristol-Myers to lay its hands on.

The rise of combination therapy

According to Bristol-Myers officials, combination therapy will become the standard treatment for cancer patients to ensure longer-term survivals. Therefore, getting hold of HuMax-IL8 provides the company with an opportunity to continue the development of potentially transformative cancer treatments.

Several drug companies are already working on multidrug combination regime to combat cancers. But one of the major issues that have been raised against multidrug combination therapy is the potential high costs of treatments.

BMY to part with $520 million to own Cormorant

Bristol-Myers will pay $95 million upfront for Cormorant, but it has agreed to pay milestones totaling $425 million upon attainment of certain development and regulatory targets. As such, Bristol-Myers is set to part with $520 million in the Cormorant acquisition.