Bristol-Myers grows cancer-treatment push with acquisition worth more than $1B, collaboration

MarketsAssociated Press

Bristol-Myers Squibb is using an acquisition that could be worth more than $1 billion and a separate collaboration agreement to continue its push into developing cancer treatments that use a patient's immune system to attack the disease.

The New York drugmaker said Monday that it will buy the privately held biotechnology company Flexus for $800 million up front and another $450 million in possible milestone payments. That deal gives Bristol-Myers access to a portfolio of potential treatments that aim to help the body's immune system attack tumors more effectively. These treatments reduce the production of kynurenine, which comes from tumor-generated enzymes and can hamper the immune system's ability to identify and destroy certain types of tumors.

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The boards of directors of both companies and Flexus shareholders have approved the deal, which is expected to close later in the first quarter.

Bristol-Myers Squibb Co. has been making a long-term transformation from producing pills for the masses to creating complex, expensive drugs for cancer and rare disorders. It's been investing significantly in immuno-oncology treatments, or drugs that take the brakes off the immune system so it can better recognize and attack cancer cells.

The company also said Monday that it also will start a collaboration with Rigel Pharmaceuticals Inc. to develop and sell so-called immunotherapies from Rigel's portfolio of potential treatments. Bristol-Myers said it will pay $30 million upfront. Rigel, which is based in South San Francisco, California, could receive milestone payments worth more than $309 million in addition to royalties from the sale of any products developed in the collaboration.

Shares of Bristol-Myers fell 13 cents to $60.39 after markets opened Monday and as broader trading indexes also slipped. But Rigel's stock soared 45 percent, or $1.15, to $3.70.