BridgeBio Pharma Inks Licensing Deal With Bristol Myers Squibb Worth up to $905 Million

Edward Kim  |

Image source: BridgeBio Pharma

BridgeBio Pharma ( BBIO) announced a licensing deal Thursday with Bristol Myers Squibb ( BMY

) to develop and commercialize BBP-398, BridgeBio's SHP2 inhibitor in oncology.

The deal expands the companies' previous agreement to study BBP-298 in combination with Bristol Myers Squibb's blockbuster Opdivo in advanced solid tumors with KRAS mutations.

Deal terms

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Under the terms of the agreement, BridgeBio will receive an upfront payment of $90 million.

The company has the potential to earn up to an additional $815 million from Bristol Myers Squibb in development, regulatory and sales milestone payments, in addition to tiered royalties in the low- to mid-teens.

SHP2 is a protein-tyrosine phosphatase whose overactivity is known to be a critical contributor to many forms of cancer in addition to being linked to resistance to several targeted therapies.

“We have seen the potential role SHP2 inhibition could play in unlocking possible combination therapies to treat patients suffering from a range of cancers," said Rupert Vessey, M.A., B.M., B.Ch., FRCP, D.Phil., Executive Vice President, Research & Early Development, Bristol Myers Squibb.

"We are hopeful this collaboration with BridgeBio will help us maximize the possibilities SHP2 inhibition with BBP-398 will hold for patients.”

Investment thesis

Click to enlarge

BridgeBio shares collapsed in December 2021, when the company announced that Phase 3 data on its cardiomyopathy drug candidate showed it to be ineffective. The stock dropped 72% on the disappointing news.

  • To the company's credit, BridgeBio didn't sugarcoat the results in its press release that day (something that many biotechs unfortunately do with poor clinical results), but the stock never recovered and has only drifted lower since then.
  • Thursday's news of the Bristol Myers Squibb deal gave shares a 14% boost to $5.94, or a market capitalization of $877 million.
  • BridgeBio is focused on licensing additional programs, which will bring in more upfront cash.
  • There are at least four clinical data readouts expected in 2022 that could provide investors with catalysts.
  • BridgeBio had $633 million in cash and equivalents as of March 31, 2022, which the company said would provide runway into 2024. 
  • The latest infusion of $90 million from BMY extends that runway even further.
  • The company has two approved products that it has licensed, along with a broad pipeline of cancer therapeutics in development.

Click to enlarge

Image source: BridgeBio Pharma


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