Bristol Myers Squibb is paying BioNTech $3.5 billion to board the PD-1/L1xVEGF-A bandwagon. The deal, which features up to $7.6 billion in milestones, gives BMS a 50% stake in one of the leading candidates in the hottest area of immuno-oncology.
BioNTech is tucked in behind Summit Therapeutics in the race to bring a PD-1/L1xVEGF-A bispecific to the U.S. market. The German biotech is running phase 3 studies in lung cancer—both small and non-small cell—and is aiming to start a pivotal trial in triple-negative breast cancer this year. Summit has global phase 3 data in one setting, but BioNTech is ahead of everyone else in the star-studded race.
That leading position has helped BioNTech land a big deal. BMS is paying $1.5 billion upfront. BioNTech will receive a further $2 billion in non-contingent anniversary payments through 2028. BMS has also committed up to $7.6 billion tied to development, regulatory and commercial milestones.
In return, BioNTech has granted co-development and co-commercialization rights to BMS. The deal positions BMS and BioNTech to jointly develop the PD-L1xVEGF-A bispecific BNT327 as a monotherapy and in combinations, splitting the costs and profits equally. Both companies can develop the candidate independently in further indications and combinations.
Enlisting the support of BMS could help BioNTech to maximize its early-mover advantage by accelerating the exploration and validation of the potential of BNT327. BMS is a top player in the checkpoint inhibitor space, the market that could be disrupted by PD-1/L1xVEGF-A bispecifics, after years of investment in its now aging oncology drugs Opdivo and Yervoy.
The deal represents a quick financial win for BioNTech, which bagged ex-China rights to BNT327 in 2023 for $55 million upfront and bought its partner Biotheus outright for $800 million upfront late last year. The Biotheus buyout marked the start of a surge in M&A activity precipitated by data showing Akeso and Summit’s PD-1xVEGF-A prospect ivonescimab beat Merck & Co.’s Keytruda.
Merck paid $588 million to join the race the day after BioNTech disclosed the Biotheus takeover. Pfizer upped the ante last month by paying 3SBio $1.25 billion upfront for a PD-1xVEGF bispecific that is set to enter phase 3 in China this year. BMS has been keeping tabs on the space, as Samit Hirawat, M.D., head of development at BMS, explained on an earnings call in April.
“One of the things that we will continue to watch out for is when does that OS data start to become available and what the overall impact on overall survival is going to look like,” Hirawat said. “Second thing to watch ... is going to be what is the impact on safety. Right now, it seems, at least from the press release we saw, it's comparable between the two arms. So we'll have to just look at those parameters.”
Hirawat shared details about what would make BMS enter the space in an interview with Fierce Biotech ahead of the deal. The executive said BMS was looking at the totality of the data and scientific insights into why PD-1/L1 and VEGF “work the way they work when they're put together on one molecule versus different molecules.” Money was the other element.
“We've always said capital allocation, the way we think about BD is very important,” Hirawat said. “We've said that we will be disciplined in terms of thinking about our capital allocation. It needs to make sense, not only from the scientific perspective and business perspective, but it also needs to be part and parcel of our capabilities and capacity, and it needs to fit in our overall armamentarium.”
Analysts at William Blair said in a note to clients Monday that they “have been skeptical on the ability of the VEGF mechanism to drive a clinically meaningful overall survival benefit, but [BMS] management maintained a 'data look very interesting' commentary, citing multiple studies showing significant PFS benefit and high activity from additional single-arm trials.”
The firm, which sat down with BMS management before the deal was announced (of which they had no prior knowledge), said the pact “aligns with the company’s strategy of bolstering its growth profile into the 2030s,” but warned that it carries “clinical risk of achieving clinically meaningful overall survival benefit.”
Shares in BioNTech jumped 11% to above $106 in premarket trading. BMS climbed 1% to $48.76.