Bristol Myers Squibb (BMS) has signed a definitive agreement for the acquisition of all of the outstanding shares of Mirati Therapeutics in a $5.8bn deal.

The company plans to buy Mirati for $58 for each share in cash, representing an equity value of $4.8bn. 

Mirati shareholders will also receive one non-tradeable contingent value right for each share held, totalling $1bn.

A commercial-stage targeted oncology company, Mirati focuses on the discovery, design and delivery of treatments for cancer. 

The latest acquisition is part of BMS’s strategy to expand its portfolio and innovative pipeline in the oncology field. 

BMS will now include Krazati (adagrasib), a lung cancer therapy from Mirati, in its commercial portfolio. 

Krazati is approved by the US Food and Drug Administration (FDA) for KRASG12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) in adults. 

BMS will also gain rights to other assets at the clinical stage, bolstering its oncology pipeline. Among these assets are MRTX1719 and a KRAS and KRAS-enabling programme that includes MRTX1133 and MRTX0902. 

MRTX1719 is currently in the Phase I developmental stage for tumour types with MTAP [S-methyl-5-thioadenosine phosphorylase] deletion.

The CVR payment is contingent on US FDA acceptance of the new drug application for MRTX1719 for NSCLC indication within seven years of the deal's closure. 

BMS will fund the prospective takeover of Mirati using both cash and debt.

The boards of directors of the two companies have given their approval.

BMS CEO and board chair Giovanni Caforio stated: “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.”

The deal will conclude by the first half of 2024.