Targeted Radiopharmaceuticals Garner Continued M&A Investments

RYZ101

In December 2023, Bristol-Myers Squibb (NYSE: BMY) acquired RayzeBio, a radiopharmaceutical therapeutic (RPT) company, for about $4.1 billion in total equity value. The acquisition was at a 104% premium to the stock’s last closing price, and barely 3 months after RayzeBio’s IPO in September 2023. RayzeBio is a clinical-stage company specializing in RPTs, particularly focusing on actinium-based therapies and a lineup of promising drug development programs. RayzeBio’s pipeline targets solid tumors, including gastroenteropancreatic neuroendocrine tumors (GEP-NETs), small-cell lung cancer, and hepatocellular carcinoma.

Through this acquisition, BMY has gained access to RayzeBio’s targeted RPT, RYZ101, currently in a Phase 3 clinical trial in GEP-NETs patients who have not responded well to Lutathera, another RPT marketed by Novartis (NYSE: NVS). RYZ101 is an actinium-225 radioisotope, an alpha particle, known for its higher energy and improved targeted tumor-killing capabilities. RYZ101 has advantages over Lutathera (lutetium Lu 177) which is a beta particle-based RPT. Besides the Phase 3 clinical trial in GEP-NETs, RYZ101 is in a Phase 1b clinical trial for small-cell lung cancer. According to Visible Alpha consensus, RYZ101 is projected to generate $87 million in 2027, and $613 million by 2033.

Targeted radiopharmaceuticals – a busy drug development modality with similarities to ADCs

The field of targeted radiopharmaceuticals remains a leading area of cancer drug research. A radiopharmaceutical is a radioisotope attached to a drug. Targeted RPTs have several similarities to antibody-drug conjugates (ADCs), in that they both consist of a binder recognizing a cancer protein target, linker, and payload to attack cancer cells. There have been several deal-making activities in the radiopharma space over the last few years. Novartis recognized the potential of the area early and acquired Endocyte in 2018 for $2.1 billion cash, gaining access to its radiopharmaceutical, Pluvicto. In October 2023, Eli Lilly (NYSE: LLY) struck a $1.4 billion deal to buy radiopharmaceutical firm Point Biopharma. Before that, in May 2023, Bayer (ETR: BAYN) partnered with Bicycle Therapeutics (NASDAQ: BCYC) to develop a new class of radiopharmaceuticals for cancer. Apart from M&A, there’s also been significant investment in companies developing RPTs, including Ratio Therapeutics and Nucleus RadioPharma.

Sector: Health Care
Industry: Pharmaceuticals
Tickers: BMY, RYZB_US