Bristol Myers Squibb (BMS) has forged a definitive merger agreement to acquire radiopharmaceutical therapeutics (RPT) company RayzeBio for a total equity value of about $4.1bn.

RayzeBio has a pipeline of potentially first-in-class and best-in-class drug development programmes that target the treatment of solid tumours.

The acquisition adds RayzeBio’s differentiated actinium-based radiopharmaceutical platform, including a rich pipeline of multiple drug development programs to BMS’s oncology franchise.

The company’s lead programme, RYZ101, targets the somatostatin receptor 2 (SSTR2), which is over-expressed in GEP-NETs and extensive stage small cell lung cancer (ES-SCLC).

It is currently in Phase 3 development to treat gastroenteropancreatic neuroendocrine tumours and early-stage development for the treatment of small cell lung cancer and potentially other tumour types.

BMS CEO Christopher Boerner said: “This transaction enhances our increasingly diversified oncology portfolio by bringing a differentiated platform and pipeline, and further strengthens our growth opportunities in the back half of the decade and beyond.

“Radiopharmaceutical therapeutics are already transforming cancer care, and RayzeBio is at the forefront of pioneering the application of this novel modality.”

Under the merger deal, BMS will start a tender offer to purchase all the outstanding shares of RayzeBio common stock for $62.50 per share in an all-cash transaction for $3.6bn net of estimated cash acquired.

The acquisition was unanimously approved by the Boards of Directors of RayzeBio and Bristol Myers Squibb.

The transaction is anticipated to close in the first half of 2024, subject to customary closing conditions.

Through a second-step merger, Bristol Myers Squibb will purchase all of RayzeBio’s remaining shares that are not tendered into the tender offer at the same price of $62.50 per share when this tender offer closes successfully.

RayzeBio president and CEO Ken Song said: “Despite therapeutic advances in recent years, the need for more effective treatments in solid tumours persists, and radiopharmaceutical therapeutics are positioned to be an important next wave of innovation in oncology therapy.

“Bristol Myers Squibb’s well-established presence in oncology and deep expertise in developing, commercialising and manufacturing treatments on a global scale makes it the ideal partner for RayzeBio at this important moment in our evolution.”