Bristol-Myers Squibb is strengthening its investment in biotech treatments for cancer with its proposed acquisition of Adnexus Therapeutics.

The companies reported on Sept. 24 that they have signed a definitive agreement under which Bristol will acquire Adnexus for $430 million, though milestones could push the figure past the $500 million mark. Adnexus is a Waltham, Mass., biotech with which Bristol already has a development deal for oncology compounds.

"Bringing Adnexus into the Bristol-Myers Squibb family builds upon a successful and productive collaboration between the two companies in oncology and is an important step in accelerating the strategic transformation of our pharmaceutical business to a biopharma business model," Bristol CEO Jim Cornelius said in a news release.

Bristol and Adnexus announced a three-year alliance to discover and develop preclinical oncology candidates using Adnexus' Adnectin protein class and PROfusion technology across six platforms in February.

That deal was worth up to $1.3 billion to Adnexus. At the time, the company predicted it would sign similar agreements with other big pharma firms.

Bristol told "The Pink Sheet" that rather than continue their alliance, the firm decided to buy Adnexus outright because "the speed in which Adnexus identified the lead Adnectin biologics exceeded our expectations."

"In the six months since commencing this discovery collaboration, Adnexus has been able to provide Bristol with Adnectins that are potent binders against all three of the collaboration's oncology targets," the company explained.

During a panel session earlier this year at the Biotechnology Industry Organization International Convention, Bristol-Myers Squibb VP-Business Development Graham Brazier noted that the number of acquisitions - as opposed to licensing deals - between big pharma and start-ups has grown at a phenomenal rate (¹ Also see "Big Pharma Seeking Simple Deals In Complex Biotech Licensing Environment" - Pink Sheet, 15 May, 2006., p. 6).

The announcement of the acquisition comes just one month after Adnexus revealed plans to mount an initial public offering.

Regarding its decision to abandon the IPO in favor of an acquisition by Bristol, the firm said, "This transaction enables Adnexus to accelerate [its] mission to bring a unique pipeline of unique targeted biologics to patients with unmet medical need in multiple therapeutic areas."

"Compared to an IPO, a merger with BMS will enable Adnexus to develop their product pipeline and build the company faster," Adnexus added.

While the February alliance related solely to oncology, the acquisition will give Bristol access to Adnexus' entire Adnectin pipeline, which includes programs in musculoskeletal disease, autoimmune disease and neuroscience.

Adnexus' lead candidate, Angiocept , a VEGF-2 inhibitor, is slated to enter Phase II in the first quarter of 2008.

Under the deal, Adnexus will become a subsidiary of Bristol and remain based in Waltham. There are no plans for layoffs, according to Bristol.

Bristol will acquire all of Adnexus' issued and outstanding shares of capital stock and stock equivalents in an all-cash transaction for a gross purchase price of $430 million, with the net price at $415 million after deducting Adnexus' net cash balance at closing.

There also is an earn-out structure under which Bristol would pay an additional $75 million, in three increments of $25 million each if certain development and regulatory milestones are achieved.

- Brooke McManus (b.mcmanus@elsevier.com)

Bristol’s Transformation To Biopharma Business Progresses With Adnexus Buy

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