8-K: Bristol Myers Squibb to Acquire 2seventy bio for $5.00 Per Share; 2seventy bio Reports Q4 and Full Year 2024 Financial Results

2seventy bio announces a definitive merger agreement to be acquired by Bristol Myers Squibb (BMS) for $5.00 per share in cash, alongside reporting its Q4 and full year 2024 financial results, highlighting a focus on Abecma commercialization and cost structure streamlining.

Summary

• 2seventy bio reported its Q4 and full year 2024 financial results.
• Bristol Myers Squibb (BMS) will acquire 2seventy bio for $5.00 per share in an all-cash transaction, expected to close in the second quarter of 2025.
• Abecma U.S. sales, as reported by BMS, were $242 million for the full year 2024.
• 2seventy bio's share of the collaboration loss with BMS for the three months ended December 31, 2024, was approximately $3.3 million.
• Total revenues for Q4 2024 were $2.9 million, compared to $10.7 million for Q4 2023.
• Total revenues for the full year 2024 were $37.9 million, compared to $100.4 million for the full year 2023.
• Research and development expenses for Q4 2024 were $8.7 million, compared to $51.2 million for Q4 2023.
• Research and development expenses for the full year 2024 were $76.9 million, compared to $230.8 million for the full year 2023.
• Selling, general, and administrative expenses for Q4 2024 were $8.5 million, compared to $16.2 million for Q4 2023.
• Selling, general, and administrative expenses for the full year 2024 were $43.9 million, compared to $69.4 million for the full year 2023.
• Net loss for Q4 2024 was $19.5 million, compared to $56.8 million for Q4 2023.
• Net loss for the full year 2024 was $57.2 million, compared to $217.6 million for the full year 2023.
• Cash, cash equivalents, and marketable securities totaled $183.6 million as of December 31, 2024.
• The merger is subject to customary closing conditions, including the tender of a majority of 2seventy bio's outstanding shares and regulatory approval.
• Following the merger, 2seventy bio's common stock will no longer be listed on Nasdaq.
• Certain stockholders owning approximately 5.3% of 2seventy bio's shares have agreed to tender their shares in the offer.
• 2seventy bio will not host an earnings conference call or provide financial guidance for 2025 due to the announced transaction.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the acquisition by BMS, which provides a clear exit strategy for investors. However, the underlying financial performance indicates challenges, reflected in declining revenues. The focus on Abecma and cost-cutting measures are viewed favorably, but the overall outlook is dependent on the successful completion of the acquisition.

Positives

• The acquisition by BMS at $5.00 per share provides immediate value to 2seventy bio's stockholders.
• The 79% reduction in year-over-year net cash spend demonstrates successful cost structure streamlining.
• The company maintains a solid cash position of $183.6 million as of December 31, 2024.
• Net loss significantly improved to $57.2 million for the year ended December 31, 2024, compared to $217.6 million in the previous year.
• Research and development expenses decreased to $76.9 million for the year ended December 31, 2024, compared to $230.8 million in the previous year.
• Selling, general, and administrative expenses decreased to $43.9 million for the year ended December 31, 2024, compared to $69.4 million in the previous year.

Negatives

• Total revenues decreased to $37.9 million for the year ended December 31, 2024, from $100.4 million in the previous year.
• 2seventy bio reported a share of collaboration loss of approximately $3.3 million related to the collaboration with BMS for the three months ended December 31, 2024.

Risks

• The closing of the acquisition is subject to customary closing conditions, including regulatory approvals, which may not be obtained.
• There is a risk that the expected benefits or synergies of the acquisition will not be realized.
• Legal proceedings may be instituted related to the merger agreement, potentially delaying or preventing the acquisition.
• Unanticipated difficulties or expenditures relating to the proposed acquisition could arise, including challenges in employee retention.
• The tender offer may not be successful if a sufficient number of shares are not tendered.

Future Outlook

The company will be acquired by Bristol Myers Squibb in a transaction expected to close in the second quarter of 2025. 2seventy bio will no longer be listed on Nasdaq following the completion of the transaction. The company will not be hosting an earnings conference call or providing financial guidance for 2025.

Management Comments

• Chip Baird, chief executive officer, 2seventy bio, stated that 2024 was a pivotal year for the company as they made significant changes to their business to streamline cost structure and focus solely on Abecma.
• Chip Baird stated that together with BMS, they remain committed to expanding the reach of Abecma.
• Chip Baird stated that they launched 2seventy with the goal of providing more time to patients, and they believe with BMS's experience and resources, they can continue to improve outcomes for people living with multiple myeloma.

Industry Context

The acquisition of 2seventy bio by Bristol Myers Squibb reflects the ongoing consolidation in the biotechnology industry, particularly in the cell therapy space. BMS's acquisition strengthens its position in the multiple myeloma treatment market by integrating 2seventy bio's expertise and Abecma into its portfolio.

Comparison to Industry Standards

• The $5.00 per share acquisition price represents a premium for 2seventy bio's shareholders, but the ultimate value will depend on the deal's completion and the long-term success of Abecma under BMS's management.
• Other comparable CAR T-cell therapy companies include Gilead Sciences (which acquired Kite Pharma) and Novartis (developer of Kymriah), both of which have established significant positions in the hematological oncology market.
• Abecma's $242 million in U.S. sales for 2024 is a notable figure, but it is essential to compare its growth trajectory and market penetration against other CAR T-cell therapies and standard treatments for multiple myeloma.

Stakeholder Impact

• Shareholders will receive $5.00 per share in cash upon completion of the acquisition.
• Employees face uncertainty regarding their roles and job security following the acquisition by BMS.
• Patients with multiple myeloma may benefit from BMS's resources and expertise in expanding the reach and improving the outcomes of Abecma.
• The impact on suppliers and creditors will depend on BMS's integration plans and its commitment to existing relationships.

Next Steps

• BMS will commence a tender offer to acquire all outstanding shares of 2seventy bio at a price of $5.00 per share.
• 2seventy bio stockholders are advised to tender their shares in the tender offer.
• The closing of the transaction is expected to occur in the second quarter of 2025, subject to customary closing conditions.
• Regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, must be obtained.
• Following the successful closing of the tender offer, BMS will acquire all remaining shares of 2seventy bio common stock through a second-step merger at the same price of $5.00 per share.

Key Dates

Keywords

2seventy bio, Bristol Myers Squibb, Acquisition, Merger, Abecma, Financial Results, Tender Offer, Multiple Myeloma, Collaboration, CAR T-cell therapy