Bristol Myers Squibb Acquires 2seventy Bio for $286M

Bristol Myers Squibb (BMS) is set to acquire 2seventy bio, taking full ownership of the cancer cell therapy Abecma amidst a challenging multiple myeloma treatment market. On Monday night, it was disclosed that BMS agreed to pay $5 per share for 2seventy, which is a 78.5% premium over its closing stock price that day. However, this acquisition price is significantly lower than its $38 per share debut price four years ago, valuing 2seventy at approximately $286 million, or $102 million when factoring in its cash reserves.

Abecma, an autologous cell therapy for multiple myeloma, was originally created by Bluebird Bio and later co-developed with BMS. In 2021, 2seventy was spun off from Bluebird as a separate publicly traded entity, inheriting Bluebird’s cancer therapies along with $442 million in funding. This spinout followed Abecma’s approval as the first CAR T-therapy for multiple myeloma. However, this initial market advantage was short-lived as Johnson & Johnson and Legend Biotech introduced Carvykti, a competing CAR T-therapy, after gaining FDA approval in 2023. Additionally, BMS and 2seventy faced production challenges due to supply chain issues affecting Abecma.

In the previous year, the FDA extended Abecma's approval for third-line treatment of multiple myeloma, broadening its market potential. Yet, this development coincided with Carvykti's expanded approval for second-line use, complicating Abecma’s competitive positioning. Carvykti, however, has been associated with a movement disorder side effect, which has not been observed with Abecma. Meanwhile, more competition in the cell therapy sector is expected, with Arcellx presenting promising Phase 2 data for its CAR T-therapy, anito-cel. This therapy, showing efficacy comparable to Carvykti and a safety profile similar to Abecma, is being developed in conjunction with Gilead Sciences.

BMS and 2seventy have been equally sharing Abecma’s U.S. sales profits and losses. According to BMS’s annual report, Abecma's revenue in 2024 was $402 million, marking a 14% decrease from the previous year. Although international sales have been increasing, U.S. sales, the largest market for Abecma, declined, resulting in a $43 million profit-sharing expense for BMS last year. In the fourth quarter of 2024, BMS reported a $122 million impairment charge attributed to a reduced cash flow forecast due to the changing competitive environment, effectively writing down the asset completely.

Following its separation from Bluebird, Abecma remained 2seventy’s sole asset. Last year, 2seventy sold its preclinical and early-stage cell therapy pipeline to Regeneron Pharmaceuticals and its hemophilia assets to Novo Nordisk, following a corporate restructuring aimed at reducing R&D expenses and focusing on Abecma’s commercialization. Simultaneously, Bluebird has struggled with the commercialization of its three FDA-approved gene therapies and recently agreed to be acquired, transitioning to a private company due to financial challenges.

The acquisition of 2seventy by BMS is anticipated to be finalized in the second quarter of this year. Leerink Partners analyst Daina Graybosch noted in a report to investors that this acquisition reflects modest confidence in Abecma’s short-term profitability prospects. By acquiring 2seventy, BMS will no longer need to share profits from the cell therapy. Graybosch also mentioned that 2seventy CEO Chip Baird recently highlighted at an investor conference the company's profitability trajectory as an attractive feature for larger corporations. However, Graybosch expressed skepticism about other companies making competing acquisition offers, citing uncertainties surrounding future revenue streams and 2seventy's divestment of its R&D assets to Regeneron and Novo Nordisk.