Shares in RayzeBio (NASDAQ:RYZB) doubled after Bristol Myers Squibb (NYSE:BMY) said it will buy it for about $4.1 billion.
Bristol Myers is paying $62.50 per share for the cancer drug maker, which is based in San Diego. The company went public in September at $18.50 per share. RayzeBio was trading early on Dec. 26 at $61.
RayzeBio targets cancer with what it calls “radiopharmaceutical” medicines. Such medicines are considered a subset of radiation treatment.
Big Pharma Buying Big
This is the second big buy in a week for Bristol Myers, which has a market cap of over $106 billion. Earlier it bought Karuna Therapeutics (NASDAQ:KRTX), for $14 billion. Karuna makes drugs targeting schizophrenia and Alzheimer’s.
RayzeBio has not yet gotten any drugs approved. It has one drug, RYZ101, in a Stage 3 clinical trial, for treating endocrine tumors. The drug also holds promise against some forms of lung cancer.
Bristol Myers said in a press release that RayzeBio’s “actinium-based” platform can offer high potency against solid tumors, with a short range of radiation limiting damage to patients.
What Happens Next?
Drug mergers accelerated in 2023 and should keep growing next year. Drug companies are also pushing back against antitrust efforts.
Big pharma has also seen rising profits. Bristol Myers recently raised its dividend, with earnings growing at 36% per year.
You should expect more drug mergers next year, as big companies with expiring patents seek new product pipelines. But you should also expect more controversy, as antitrust enforcement gears up.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
