Bristol Myers Squibb's Turning Point Offer Fair, Says Stifel

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Bristol Myers Squibb's Turning Point Offer Fair, Says Stifel
Credit: © Reuters.

By Sam Boughedda

On Friday, it was announced that Bristol-Myers Squibb (NYSE: BMY ) will acquire Turning Point Therapeutics (NASDAQ: TPTX ) for $4.1 billion or $76 a share, more than double Thursday's closing price of $34.16.

Following the news, Stifel analyst Bradley Canino said the cash offer for TPTX is "a fair offer," valuing TPTX’s pipeline at $3.2 billion.

"This offer price is double the current stock price and our valuation for the company, and it will surprise many investors that over the past year that have begun to believe late-to-market targeted oncology drugs are likely to be commercial failures—even those with clinical data differentiation, like repotrectinib. More broadly, this is a needed validation of the targeted oncology space," said Canino.

"It suggests both that value can still be extracted from incremental improvements on known and approved drug mechanisms, and that large pharma is ready to fill its late-stage pipelines and launch drugs with such profiles."

Meanwhile, BMO's Evan David Seigerman said in a note to clients that "while Bristol was not on list of companies that need to buy, this potential acquisition could help bolster the company's offering in NSCLC."

"TPTX's portfolio includes other early stage clinical assets across targeted oncology. We see this deal as a positive for the sector and could signal an increased willingness to transact among BioPharma."

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