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Bristol-Myers, Nektar collaborate in $1.85B deal to develop cancer medicines

Bristol-Myers Squibb Co. signed a multibillion-dollar strategic development and commercialization agreement with Nektar Therapeutics to develop medicines for multiple cancer types.

Bristol-Myers will advance Nektar's immuno-oncology program NKTR-214 in combination with its medicines Opdivo and Yervoy in more than 20 indications across nine tumor types.

Bristol-Myers will pay $1 billion to Nektar and invest $850 million in the company by acquiring 8,284,600 shares at $102.60 apiece.

The transaction, which is expected to close during the second quarter of 2018, will impact Bristol-Myers' non-GAAP earnings per share by 2 cents in 2018 and by 10 cents for the year 2019. Sidley Austin LLP is acting as legal counsel to Nektar for the strategic collaboration agreement and equity investment.

Nektar is also eligible to receive an additional $1.78 billion in milestones payments tied to the collaboration. The company will receive a majority of the profits from the sale of NKTR-214 once commercialized and will be required to bear a portion of trial costs investigating the medicine with Opdivo or Opdivo plus Yervoy.

Bristol-Myers will lead global commercialization for NKTR-214, whereas Nektar will co-commercialize the medicine in U.S., major EU markets and Japan.

The companies, which plan to begin trials within 14 months, also intend to develop other potential cancer drug combinations from their product portfolio as well as from third parties.

Nektar and Bristol-Myers entered into a clinical collaboration in September 2016 to evaluate Opdivo in combination with NKTR-214. A phase 1/2 study is underway, consisting of 350 patients with melanoma, kidney, non-small cell lung cancer, bladder and triple-negative breast cancers.

Opdivo is also known as nivolumab, and Yervoy is also called ipilimumab.