Bristol Myers Squibb agrees $4.8bn Mirati deal

BY Richard Summerfield

Bristol Myers Squibb has agreed to acquire cancer drug manufacturer Mirati Therapeutics in a deal worth $4.8bn. The acquisition will see Bristol Myers Squibb diversify its oncology business with lung cancer drug Krazati, which was approved by the US Food and Drug Administration (FDA) in December. A second compound – MRTX1719 – which could be used in some types of lung cancer was also attractive to the company.

Under the terms of the deal, Bristol Myers Squibb will pay $58 per share in cash, for a total equity value of $4.8bn. Mirati stockholders will also receive one non-tradeable contingent value right (CVR) for each Mirati share held, potentially worth $12 per share in cash, representing an additional $1bn of value opportunity. The transaction was unanimously approved by both the Bristol Myers Squibb and the Mirati boards of directors.

According to a statement announcing the deal, Bristol Myers Squibb expects to finance the acquisition with a combination of cash and debt. The deal is expected to be dilutive to the company’s non-generally accepted accounting principles (GAAP) earnings per share by approximately 35 cents per share in the first 12 months after the transaction closes, the statement added.

“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” said Giovanni Caforio, chief executive and board chair of Bristol Myers Squibb. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals. Importantly, by leveraging our skills and capabilities, including our global commercial infrastructure, we will ensure patients globally can benefit from Mirati’s portfolio of innovative medicines.”

“Since our founding 10 years ago, Mirati has made significant strides in transforming the lives of patients living with cancer through the development of innovative therapies,” said Charles Baum, founder, president and chief executive of Mirati Therapeutics, Inc. “Through our discovery and development of next-generation targeted cancer therapeutics, we have built a robust pipeline of potentially best-in-class treatments that offer renewed hope for patients. This transaction is a testament to the potential of our platform and to our team’s hard work and dedication to changing lives.

“Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster, and deliver on our vision of unlocking the science behind the promise of a life beyond cancer. We believe that this transaction is the best way to benefit patients and maximize value for shareholders,” he added.

“Mirati strengthens and complements our current portfolio by adding assets focused on intrinsic tumor targets in the MTAP and MAPK pathways,” said Samit Hirawat, chief medical officer and head of global drug development at Bristol Myers Squibb. “We believe Mirati’s assets have the potential to change the standard of care in multiple cancers, both as standalone therapies and in combination with Bristol Myers Squibb’s existing pipeline. We are excited about the significant potential that this transaction creates to transform patients’ lives through science around the world.”

News: Bristol-Myers Squibb to acquire Mirati in up to $5.8 billion deal

Eli Lilly agrees $1.4bn Point Biopharma Global deal

BY Richard Summerfield

In a deal which will strengthen the company’s oncology pipeline, Eli Lilly has announced it is acquiring Point Biopharma for $1.4bn.

Under the terms of the deal, Eli Lilly will pay $12.50 per outstanding share of Point, representing a 67 percent premium to the company’s 30-day volume-weighted average price and a premium of approximately 87 percent to Point’s closing stock price on 2 October 2023, the last trading day before the announcement of the transaction. The board of directors of both companies have approved the transaction, and Lilly and Point expect to close the deal toward the end of 2023, subject to customary closing conditions.

“Over the past few years, we have seen how well-designed radiopharmaceuticals can demonstrate meaningful results for patients with cancer and rapidly integrate into standards of care, yet the field remains in the early days of the impact it may ultimately deliver,” said Jacob Van Naarden, president of Loxo@Lilly, the oncology unit of Eli Lilly and Company. “We are excited by the potential of this emerging modality and see the acquisition of POINT as the beginning of our investment in developing multiple meaningful radioligand medicines for hard-to-treat cancers, as we have done in small molecule and biologic oncology drug discovery and development. We look forward to welcoming POINT colleagues to Lilly and working together to build upon their achievements as we develop a pipeline of meaningful new radioligand treatments for patients.”

“The combination of POINT’s team, infrastructure and capabilities with Lilly’s global resources and experience could significantly accelerate the discovery, development and global access to radiopharmaceuticals,” said Joe McCann, chief executive of Point. “I look forward to a future where patients all over the world can benefit from the new cancer treatment options made possible by the joining of our two companies today.”

Eli Lilly has agreed to a string of deals this year, including the $2.4bn buyout of Dice Therapeutics, the $1.93bn purchase of privately held Versanis, and Siglon for around $310m. These deals have been oncology focused, and the deal for Point will grant Eli Lilly access to experimental therapies that enable precise targeting of cancer. Point Biopharma is currently testing radioligand therapy candidates, PNT2002 and PNT2003, in late-stage studies. Topline data from these studies are expected in the fourth quarter of 2023.

News: Lilly eyes targeted cancer therapies with $1.4 billion Point Biopharma deal

European VC investment €96bn over last 10 years, reveals new report

BY Fraser Tennant

Venture capitalists (VCs) invested €96bn in almost 27,000 European companies over the past decade, including more than €18bn in 2022 alone, according to a new report by Invest Europe.

In its ‘Venture Capital: Fuelling European Innovation’ report, Invest Europe highlights VC’s contribution to a stronger European economy and a better society – digging deep into the data on fundraising, investment, returns to investors and job creation, among others.

The report shows the step change in European VC fundraising over the five years to 2022, including an eight-fold increase in capital raised by Nordic VCs and a three-fold increase in the Germany, Austria and Switzerland (DACH) region, as capital committed to funds reached a record €23bn last year.

In addition, Invest Europe highlights European VC’s 12 percent net return since inception, far outperforming the Morgan Stanley Capital International (MSCI) Europe benchmark, which returned 7.67 percent per annum over the same period.

Furthermore, recent performance has accelerated, with European VC delivering a net return of 23.07 percent over 10 years, creating wealth for long-term investors including funds of funds investing on behalf of pension funds, family offices and corporate investment divisions.

“European VC is the fuel that keeps the engine of innovation running,” said Eric de Montgolfier, chief executive of Invest Europe. “With the help of VC investment and expertise, European start-ups are at the forefront of developments in software and cloud computing, driving deep tech advances in artificial intelligence and robotics, creating cutting-edge biotech treatments for cancer and infectious diseases, and pushing the boundaries of cleantech solutions for a cleaner, greener future.”

The report also outlines the role of venture capital as a cornerstone of European economies and communities, with the ecosystem providing jobs for nearly 900,000 people at the end of 2021. Companies backed by VC have generated double-digit employment growth in most years since 2018, including 15.3 percent net new jobs in 2021, compared to 1.2 percent growth for all European companies.

Mr de Montgolfier concluded: “Europe’s VC and start-up ecosystem is not only producing transformative technologies that will change people’s lives; it is also generating social and economic benefits that can improve livelihoods, from new jobs to wealth creation for long-term investors.”

Report: Venture Capital: Fuelling European Innovation Report

Digital skills gap hampering banks, claims new report

BY Fraser Tennant

A rapidly-widening talent gap is hampering traditional banks’ ability to compete and stay relevant in a digital-first world, according to a new report by The Josh Bersin Company. The majority of banks around the world are struggling to meet the need to digitalise.

In its ‘Consumer Banking Under Siege: Addressing the Digital Capability Gap’, the research reveals that most banks’ skills bases are falling behind, despite attempts to hire fresh talent, and the sector will see a massive shortage of people with suitable digital and technology skills by 2025.

Unless banks face this talent issue, the report suggests that longstanding players will never catch up with their modern counterparts, potentially losing relevance within five to 10 years. The report also suggest that banks identified as ‘trailblazers’ have a number of things to teach the rest of the market.

The report’s key findings include: (i) the digital transformation of banks is not a technology problem, but a talent challenge; (ii) most banks are struggling to offer the great digital experiences that clients now expect, but their skills base is failing to keep up, despite attempts to hire fresh talent; (iii) trailblazer banks – those moving in the right strategic direction and seeing positive business results – are applying talent intelligence techniques to look laterally at opportunities to reskill employees out of roles that are becoming obsolete; and (iv) as a secondary strategy, leading banks are also proactively targeting suitable tech talent and designing ‘irresistible’ workplaces to attract and keep them.

“Most consumer banks are currently trying to hire their way out of this talent challenge,” said Stella Ioannidou, senior research manager at The Josh Bersin Company and author of the report. “But there are not enough people with relevant tech skills to go round, particularly those who are also experienced in the banking industry.”

For example, in the US, the report notes that in 2023 there was a 54,000 discrepancy in the talent available, a figure which, if it persists, will grow into a 350,000 gap in future-ready technologists with banking experience.

“Even if banks look for tech talent without direct sector experience, they face fierce talent competition from consulting firms, IT service providers, Big Tech and so on, so they need a different approach,” she continued. “They need to reskill the people they already have and make it a priority to keep employees close and engaged – and they need to do that now, as it will take time to build the capabilities and skills they so badly need.”

Report: Consumer Banking Under Siege: Addressing the Digital Capability Gap

Cisco strikes $28bn Splunk deal

BY Richard Summerfield

In a deal which represents the biggest technology transaction of the year to date, Cisco Systems has agreed to acquire cyber security firm Splunk in a $28bn deal. The deal will create one of the world’s largest software companies upon completion.

Cisco offered $157 in cash for each share of Splunk, a 31 percent premium to the company’s last closing price before the deal was announced.

The acquisition has been unanimously approved by the boards of directors of both Cisco and Splunk, and it is expected to close by the end of the third quarter of 2024, subject to regulatory approval and other customary closing conditions, including approval by Splunk shareholders. The deal is expected to improve Cisco’s gross margins in the first year and non-generally accepted accounting principles (GAAP) earnings in year two.

“We’re excited to bring Cisco and Splunk together,” said Chuck Robbins, chair and chief executive of Cisco. “Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient, while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and chief executive of Splunk. “Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations.”

Splunk’s technology helps businesses monitor and analyse their data to minimise the risk of hacks and resolve technical issues faster. Cisco will utilise Splunk’s technology to strengthen its software business, which relies heavily on AI and provides a variety of cyber security services, such as building tools to protect users and digital businesses from data breaches.

In the quarter ended 31 July 2023, Splunk’s annual recurring revenue was $3.9bn, up 16 percent on the same period last year. Its revenue for the quarter was $910m, beating analysts’ expectations.

The deal for Splunk will dwarf Cisco’s previous largest deal, the 2006 acquisition of cable set-top box maker Scientific Atlanta for $6.9bn.

News: Cisco to buy cybersecurity firm Splunk for $28 billion