Bristol Myers Squibb (BMS) plans to buy out its partner in developing the blockbuster multiple myeloma drug Abecma® (idecabtagene vicleucel), by agreeing to acquire 2seventy bio for approximately $286 million, the companies said.
The deal, announced late Monday, caps a turbulent three years for 2seventy bio. The company served as the oncology business of Bluebird Bio until Bluebird spun out 2seventy in 2021. Bluebird’s longtime CEO or “chief Bluebird” Nick Leschly served as 2seventy’s first CEO or “chief kairos officer” until he stepped down last year when current CEO Chip Baird’s appointment took effect, with Leschly becoming chairman.
The turnover at the top followed 2seventy’s inability to reverse net losses that reached $217.57 million in 2023, on revenue of just $100.387 million. 2seventy responded in September 2023 with a restructuring that eliminated 40% of its workforce, followed by an additional 14% workforce reduction (about 30 jobs) in January 2024 after the company narrowed its focus exclusively to commercialization and further development of Abecma with BMS.
Abecma is a B-cell maturation antigen (BCMA)-directed genetically modified autologous T cell immunotherapy that first won FDA approval in 2021 as the first FDA-approved chimeric antigen receptor T cell (CAR T) cell therapy indicated for relapsed or refractory multiple myeloma following four or more lines of therapy. Following a label expansion last year, Abecma is now indicated to treat adults with relapsed or refractory multiple myeloma after two or more prior lines of therapy including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.
The companies oversee a clinical development program for Abecma that includes two ongoing clinical studies in earlier lines of treatment for patients with multiple myeloma, KarMMa-2 (NCT03601078) and KarMMa-3 (NCT03651128).
Reduced red ink
2seventy’s narrowing of focus, plus job cuts, helped reduce the company’s red ink for the first nine months of 2024 to a net loss of $37.727 million, compared with a $160.748 million net loss for January–September 2023.
Abecma generated U.S. revenue of $242 million in 2024, within 2seventy’s earlier-issued guidance to investors of between $240 million and $250 million. U.S. commercial revenue is split between 2seventy and BMS, which said U.S. revenue fell 32% from 2023.
“A year ago, 2seventy decided to exclusively focus on unlocking the value of Abecma, with the goal of delivering more time for people living with multiple myeloma and maximizing value for all stakeholders,” Baird said in a statement. “We believe that Abecma will continue to benefit from BMS’ experience and resources to ensure this important therapy is delivered to patients who need it.”
Leerink Partners analyst Daina M. Graybosch, PhD, expressed more caution on the BMS-2seventy combination.
“BMY’s acquisition of 2seventy bio (TSVT) shows modest confidence in the near-term profit potential of the companies’ shared autologous BCMA CAR-T Abecma (ide-cel),” Graybosch wrote in a research note. “By our estimates, BMY could realize a return in as little as two years, based on saved profit-sharing expenses payable to 2seventy (as part of their prior partnership agreement).
While the deal value of $286 million is 41% below Leerink’s prior discounted cash flow valuation of $487 million for 2seventy, “we do not expect that an alternative acquirer will emerge, and expect that the transaction with BMY will close,” Graybosch predicted. “2seventy has been successful since their 2023 reorganization in optimizing their business for strategic optionality, but their focus has been on trimming the cost base.”
BMS will need to consider a competitive challenge for Abecma, the Leerink analyst cautioned, citing the expected 2026 launch of “anito-cel” by Kite, a Gilead company, and Arcellx.
“Thus far, anito-cel has an efficacy profile in line with market leader Carvykti, and movement neurotoxicity (MNT) safety profile in line with Abecma—threatening Abecma’s niche as the option for patients who want to avoid the risk of MNTs like Parkinsonism,” Graybosch added. She downgraded the firm’s rating on 2seventy from “Outperform” to “Market Perform” and lowered its 12-month price target from $9 to $5 a share.
Bluebird Bio last month entered into a definitive agreement to be acquired by funds managed by publicly-traded Carlyle and privately-held SK Capital Partners, partnering with a team of veteran biotech executives led by former Mirati Therapeutics CEO David Meek.
Shrinking workforce
2seventy’s workforce shrunk from 437 full-time employees as of March 1, 2022, about a year after the spinout was completed, to 425 full-time employees as of February 1, 2023, to 274 employees the same day a year later, according to Form 10-K annual reports filed with the U.S. Securities and Exchange Commission.
In addition, 2seventy shed 160 jobs last year when it sold its cell therapy pipeline and operations to Regeneron Pharmaceuticals for at least $15 million, including its bbT369 program in b-cell non-Hodgkin lymphoma (b-NHL), its SC-DARIC33 program in acute myeloid leukemia (AML), MUC16 in ovarian cancer, a T-cell receptor (TCR) program targeting MAGE-A4 in cancers, and several unnamed targets. Regeneron transformed the assets into a new Regeneron Cell Medicines business led by 2seventy’s former CSO Philip Gregory.
In December, Regeneron paid a $1 million milestone payment to Medigene, whose end-to-end platform generated the TCRs applied in Regeneron’s MAGE-A4-TCR program. The payment followed an unspecified development milestone for the program occurring in a clinical trial in China led by JW Therapeutics, a prior collaborator of 2seventy bio—the first clinical use of the platform, Medigene stated at the time.
At $5 per share, the acquisition deal represents an 88% premium to 2seventy’s closing stock price of $2.66 on Friday. While the deal has a total equity value of approximately $286 million, the net value shrinks to $102 million after accounting for 2seventy’s approximately $184 million of cash, cash equivalents, and marketable securities as of December 31, 2024, disclosed last month.
BMS said it will begin a tender offer to acquire all outstanding shares of 2seventy bio in an all-cash transaction unanimously recommended by 2seventy’s board. The companies said stockholders owning approximately 5.3% of 2seventy’s outstanding shares have agreed to tender all of their owned shares in the offer.
The acquisition is expected to close in the second quarter subject to customary closing conditions, including the tender of most of the outstanding shares of 2seventy’s common stock and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Upon successful closing of the tender offer, BMS said it will acquire all remaining shares of 2seventy’s common stock that are not tendered in the tender offer through a second-step merger at the same $5 per share as the tender offer. 2seventy’s common stock will no longer be listed for trading on Nasdaq.
2seventy investors roared their approval of the deal by sending the company’s shares rocketing 77% from $2.80 to $4.95 Tuesday in early trading as of 11:15 a.m. ET. BMS shares dipped 2%, from $63.11 to $61.79.
“The strategic rationale for this acquisition is clear and today’s announcement represents the culmination of the journey for 2seventy bio,” Baird added.