Big Pharma companies are making big moves in biotechnology, inkking two major deals on Monday that show investors can still win substantial payouts. Sanofi agreed to buy Blueprint Medicines for $9.1bn, with the deal increasing to $9.5bn if milestones are met. Bristol-Myers-Squibb will pay BioNTech $3.5bn for 50% of an immunotherapy cancer drug in trials, rising to $11.1bn.
These deals come as biotech investors face uncertainty due to high interest rates and healthcare policy direction. However, when conditions are right, companies can still attract big payouts. Blueprint Medicines’ investors received a 27% premium to Friday’s share price, while BioNTech’s stock rose almost 20% on Monday morning.
The deals involve treatments for rare immunological disorders and cancer, both in hot therapeutic areas that could explain their success. BioNTech’s compound combines immune-oncology with other mechanisms, which has been a successful strategy seen in Merck’s Keytruda. Pfizer recently struck a licensing agreement in this space with Chinese biotech 3SBio.
Large drugmakers need to bolster growth prospects as patents expire soon. Sanofi highlighted the importance of diversifying bets after disappointing results for one of its homegrown drugs on Friday. Despite the challenges facing biotech, these deals show investors still have opportunities to pick winners when a company has an exciting drug and a pipeline with potential.
Source: https://www.ft.com/content/8dde11d5-b490-4db6-8584-f1228670f32c