Bristol-Myers buying heart drug maker Cardioxyl for $2.1B

AP News
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Posted: Nov 02, 2015 12:27 PM

TRENTON, N.J. (AP) — Bristol-Myers Squibb Co. is acquiring a private biotech company developing a medicine for one of the most common cause of hospitalizations in senior citizens, in a deal that could be worth up to $2.1 billion.

New York-based Bristol-Myers, which makes drugs for hepatitis C, cancer and heart attack prevention, said Monday that it could close its deal to acquire Cardioxyl Pharmaceuticals Inc. by year's end.

Cardioxyl, based in Chapel Hill, North Carolina, develops drugs that release a molecule called nitroxyl, which improves the function of heart muscle and blood vessels.

Its lead drug, CXL-1427, is in mid-stage patient testing as an intravenous treatment for acute heart failure. That's a condition in which the heart quickly loses its ability to pump enough blood, and with it oxygen, through the body. That causes symptoms including wheezing, shortness of breath, fluid buildup in the extremities, fatigue and confusion.

Francis Cuss, Bristol-Myers' chief scientific officer, said Cardioxyl's drug "has the potential to change the course of the disease rather than simply treating the symptoms."

About 5.7 million Americans, mostly over age 65, suffer with heart failure, according to the American Heart Association.

It can develop suddenly, as in acute heart failure, or slowly over time as the heart pumps less and less blood, which is called congestive heart failure or chronic heart failure. Usually the heart's main pumping chamber, the left ventricle, becomes enlarged due to the condition, further reducing the amount of blood it can pump.

In early patient testing, CXL-1427 was shown to improve how the heart muscle contracts and relaxes without increasing heart rate or demand for oxygen. Current treatments for acute heart failure boost heart rate and oxygen consumption, which can raise the risk of death, abnormal heartbeats and reduced blood flow due to a blocked or narrowed blood vessel.

Treatment of heart failure cost more than $34 billion per year in the U.S. alone, mainly due to the cost of hospitalizations.

Under its deal, Bristol-Myers initially will pay Cardioxyl up to $300 million in upfront and short-term payments for meeting development milestones. Bristol-Myers will pay up to $1.78 billion more if Cardioxyl medicines achieve certain milestones for testing, regulatory approval and then sales.

The boards of both companies have approved the deal, which must pass regulatory review and meet other conditions before it's completed.

Bristol-Myers says the deal will reduce its earnings per share for 2015 by about 12 cents.

In midday trading, Bristol-Myers shares rose 16 cents to $66.11.

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