Bristol-Myers Squibb seeks growth with Cardioxyl buy

BMS will acquire the North Carolina-based company for $300M, with the chance for up to $1.775 billion in additional consideration if set milestones are met

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NEW YORK & CHAPEL HILL, N.C.—Bristol-Myers Squibb Co. and Cardioxyl Pharmaceuticals Inc., a private biotechnology company discovering and developing novel therapeutic agents for cardiovascular disease, have inked a definitive agreement by which Bristol-Myers Squibb will acquire all of Cardioxyl's issued and outstanding capital stock. Per the transaction, Bristol-Myers Squibb will pay up to $300 million in upfront and near-term milestone payments, with potential additional consideration of up to $1.775 billion if certain development, regulatory and sales milestones are met.
Both Bristol-Myers Squibb's and Cardioxyl's boards of directors have approved the transaction, which is expected to close in the fourth quarter of this year, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Bristol-Myers Squibb expects the transaction to be dilutive to its 2015 GAAP earnings per share by approximately 12 cents, with minimal dilution to non-GAAP earnings per share in 2015 and 2016.
“The acquisition of Cardioxyl strengthens Bristol-Myers Squibb’s heart failure pipeline with a Phase 2 asset that has the potential to change the course of the disease rather than simply treating the symptoms,” Francis Cuss, executive vice president and chief scientific officer at Bristol-Myers Squibb, said in a press release. “Bristol-Myers Squibb is uniquely positioned, with our understanding of patient needs in the hospital setting and our heritage in cardiovascular diseases, to continue development of CXL-1427 as a potential new therapy to address the clinical and economic burden of heart failure.”
With this deal, Bristol-Myers Squibb adds Cardioxyl's lead asset, CXL-1427, to its portfolio. The compound is a novel nitroxyl (HNO) donor (prodrug) in Phase 2 clinical development as an intravenous treatment for acute decompensated heart failure (ADHF). CXL-1427 functions by releasing nitroxyl, a molecule shown to have beneficial effects on heart muscle as well as vascular function. Preclinical and clinical data show that the compound improves heart muscle contraction and relaxation without increasing heart rate or oxygen needs, which is a benefit over existing ADHF therapies that tend to improve heart muscle function with the side effects of increased heart rate and/or oxygen consumption and are linked with increased risk for ischemia, arrhythmias and increased mortality.
“We are excited about the breadth of drug development capabilities and cardiovascular expertise that Bristol-Myers Squibb will bring to the nitroxyl donor program,” Dr. Christopher A. Kroeger, president and CEO of Cardioxyl, remarked in a statement. “Heart failure is an important and under-served therapeutic area, and we believe Bristol-Myers Squibb is the optimal partner to bring new therapeutic options to the patients who need them.”
In other recent company news, Bristol-Myers Squibb announced a collaboration agreement with The Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins as part of the former's Immuno-Oncology Rare Population Malignancy (I-O RPM) program in the United States. This program is a multi-institutional initiative with academic-based cancer centers focused on clinical investigation of immuno-oncology therapeutics for patients with high-risk, poor prognostic cancers, defined as a rare population malignancy. The two organizations will conduct a number of early-phase clinical studies, with Bristol-Myers Squibb to fund positions within The Johns Hopkins University School of Medicine fellowship program.

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