More than a year into a strategic pivot to zero in on the multiple myeloma cell therapy Abecma, 2seventy bio is selling itself to partner Bristol Myers Squibb.
Bristol Myers has agreed to buy out its Abecma partner for a total equity value of about $286 million. Considering 2seventy’s cash on hand of $184 million, the Big Pharma firm is essentially paying $102 million for the biotech.
The $5-per-share purchase price represents an 88% premium to 2seventy’s closing price on Friday. But the deal amount still came 41% below Leerink Partners’ $487 million valuation for 2seventy based on the biotech’s expected future cash flows. Before ending its coverage of 2seventy at the end of February, Citi had put its price target for the biotech at $9 per share.
The acquisition “shows modest confidence in the near-term profit potential” of Abecma, analysts at Leerink said in a Tuesday note to clients. For its part, 2seventy has projected that it can begin to break even on a quarterly basis sometime this year.
Despite the relatively low price, Leerink analysts do not expect that another bidder will emerge.
While Abecma may become profitable for 2seventy this year, “we also believe the uncertainty in future revenue streams would be an overhang for any larger company considering an acquisition,” the Leerink team said.
Besides an ongoing rivalry with Johnson & Johnson and Legend Biotech’s CAR-T therapy Carvykti, one potential major threat facing Abecma is Gilead Sciences and Arcellx’s candidate anitocabtagene autoleucel (anito-cel), which is expected to reach the market next year. All three therapies target BCMA.
Anito-cel has reported strong efficacy results in late-line myeloma that analysts believe are on par with market leader Carvykti but with a better side effect profile, especially on delayed neurotoxicity such as Parkinsonism. This means anito-cel could threaten Abecma’s niche as an option for patients who want better safety, the Leerink team pointed out.
2seventy has been slimming down since the fall of 2023 until it was left with nothing else but the Abecma partnership with BMS. The Cambridge, Massachusetts-based biotech had divested its cell therapy R&D programs to Regeneron for $5 million upfront in early 2024. As the Leerink team noted, the company’s remaining business has little to no value for any company looking to build a cell therapy franchise.
The sale to BMS marks a muted end for 2seventy after the company it spun out from, gene therapy specialist bluebird bio, was also recently bought out. Bluebird separated its oncology portfolio to form 2seventy back in 2021. A few days ago, bluebird reached a deal to sell itself to Carlyle and SK Capital for $29 million, representing a deep discount to its open-market price.
For BMS, the 2seventy transaction “gives BMS full freedom to operate, improves efficiencies, and ensures appropriate business continuity for” Abecma, Lynelle Hoch, president of BMS’ cell therapy organization, said in a statement to Fierce Pharma.
The deal comes as a bargain for the Big Pharma company. By Leerink’s estimates, BMS could realize a return in just two years because the company won’t need to share profits on Abecma anymore.
Abecma is hardly the center of focus for BMS investors these days. Instead, many investors are tracking the launch of the newly approved antipsychotic Cobenfy, which BMS picked up from its $14 billion acquisition of Karuna Therapeutics last year.