Bristol-Myers Squibb said Wednesday it is buying Medarex for about $2.1 billion in cash, the latest in a string of biotechnology acquisitions by the drugmaker.
New York-based Bristol-Myers said it will pay $16 a share for Medarex, based in Princeton, N.J. The price represents a 90% premium over Medarex's closing share price Wednesday of $8.40.
Bristol Myers' CEO James Cornelius said the deal fits into Bristol-Myers' ongoing strategy, under it is seeking to transform itself into a biopharmaceutical company by buying biotech drug compounds or companies in priority disease areas, while shedding noncore assets.
Medarex develops drugs that use antibody technology to home in on and attack cancer, inflammation, autoimmune and infectious diseases.
"Medarex's technology platform, people and pipeline provide a strong complement to our company's biologics strategy, specifically in immuno-oncology," Cornelius said.
Just last month, shares in Medarex surged after an unusual report that two men in a study of its experimental prostate cancer drug had their tumors shrink dramatically.
Bristol Myers noted that it will acquire full ownership and rights to the drug, ipilimumab, as part of the deal. It said the drug, if approved by regulators, could be an important contributor to Bristol-Myers' future growth.
Bristol-Myers, the world's No. 15 drugmaker by sales, is the maker of blood thinner Plavix, and the psychiatric drug Abilify. But the company is facing new competition for both of those blockbusters drugs and could see its revenue from them erode.
The Medarex deal has been approved by both companies' boards and has an aggregate price of about $2.4 billion. But it includes Medarex's projected $300 million in cash and marketable securities, giving it an implied price tag of $2.1 billion, the companies said.
The deal comes three weeks after Bristol-Myers sold Britain's GlaxoSmithKline its branded generic business in the Middle East region for about $23.2 million.
Last year, Bristol-Myers bought Kosan Biosciences, a Hayward, Calif., company developing novel cancer treatments, after earlier licensing a compound for treating heart attacks, and buying a biotech company called Adnexus Therapeutics.
It lost out to Eli Lilly, however, in its bid to buy biotech cancer drug maker ImClone Systems.
The pharmaceutical industry has seen a rash of deals this year. The Roche Group bought the 44% of Genentech it didn't already own for $47 billion. Pfizer is buying Wyeth for $64 billion and Merck is buying Schering-Plough for $43 billion.