Bristol Myers Squibb (BMS) announced Monday it will acquire its Abecma partner 2seventy bio for $286 million in an all-cash transaction, bringing the CAR-T therapy fully under BMS control and ending a profit-sharing agreement between the companies.
The deal values 2seventy bio at $5 per share, representing an 88% premium over the biotech's closing price on March 7. After accounting for 2seventy's estimated cash reserves, the net value of the acquisition is approximately $102 million. The transaction is expected to close in the second quarter of 2024, subject to customary conditions including antitrust clearances and shareholder approval.
A Brief but Tumultuous Journey
2seventy bio emerged in May 2021 as a cancer-focused cell therapy spinout from bluebird bio, taking with it the BMS-partnered CAR-T therapy Abecma. The treatment had received FDA approval just months earlier in March 2021 as the industry's first BCMA-targeted CAR-T therapy for relapsed or refractory multiple myeloma.
"The strategic rationale for this acquisition is clear and today's announcement represents the culmination of the journey for 2seventy bio. We believe that Abecma will continue to benefit from BMS' experience and resources to ensure this important therapy is delivered to patients who need it," said 2seventy CEO Chip Baird in a statement.
Despite having an approved product and substantial funding at launch, 2seventy bio struggled to maintain its market value. The company faced numerous challenges, including manufacturing constraints that initially limited Abecma's availability and growing competition from Johnson & Johnson and Legend Biotech's Carvykti, which generated nearly $1 billion in sales last year compared to Abecma's $406 million.
Abecma's Performance and Market Position
Since its initial approval, Abecma has expanded its label to earlier treatment settings. In April 2023, the FDA approved its use in patients who had undergone at least two prior lines of therapy, broadening its potential patient population.
While BMS reported $406 million in worldwide sales for Abecma in 2023, only $43 million was transferred to 2seventy bio under their profit-sharing arrangement. The therapy faces increasing competition not only from Carvykti but also from an upcoming multiple myeloma cell therapy developed by Gilead Sciences and Arcellx.
Leerink Partners analysts noted that BMS's offer indicates "modest confidence in the near-term profit potential" of Abecma, though the acquisition will help the pharmaceutical giant eliminate "future profit-sharing costs."
Strategic Alignment with BMS's Cost-Cutting Initiatives
The acquisition aligns with BMS's recent focus on cost-cutting measures and strategic deals to strengthen its portfolio. In April 2023, the company launched a "strategic productivity initiative" aimed at reducing expenditures by $1.5 billion through 2025, which included approximately 2,200 layoffs and organizational restructuring. BMS recently increased its savings target by an additional $2 billion through 2027.
This financial discipline comes as BMS faces patent expirations for three of its top-performing products. The cancer immunotherapies Yervoy and Opdivo will lose key patent protections in 2025 and 2028, respectively, while the blockbuster blood thinner Eliquis, which generated more than $13 billion in revenue, will face generic competition beginning in 2026.
The End of an Era for Cell Therapy Pioneers
The 2seventy bio acquisition follows closely on the heels of bluebird bio's own exit from the public markets. In February 2024, bluebird agreed to go private in a $29 million deal with two private equity firms, a dramatic conclusion for a company that once led the gene therapy renaissance.
Both companies' struggles highlight the significant challenges facing cell and gene therapy developers, including high operational costs, complex manufacturing requirements, and difficulties in achieving sustainable commercial success despite scientific breakthroughs.
2seventy bio had already begun divesting assets before the acquisition, selling off its pipeline to Regeneron in January 2024 for just $5 million upfront, leaving analysts questioning the company's growth prospects. CEO Chip Baird had told BioSpace in October 2023 that 2seventy was "tantalizingly close" to reaching cash break-even after two difficult years marked by layoffs, pipeline reorganizations, and regulatory challenges.
Looking Forward
For BMS, the acquisition represents an opportunity to streamline operations around Abecma and potentially improve its market position against competitors. The company now has complete control over the therapy's development, manufacturing, and commercialization, which may allow for more efficient resource allocation and strategic decision-making.
The deal also reflects the ongoing consolidation in the biotech sector, particularly among cell and gene therapy companies facing commercial challenges despite scientific promise. As these advanced therapies continue to evolve, the industry may see further integration of specialized biotechs into larger pharmaceutical organizations with the resources to navigate the complex development and commercialization landscape.
