Sobi makes billion-dollar bid for CTI Biopharma
Sobi has made a bid for US CTI Biopharma worth SEK 17 billion. The transaction will be financed through a rights issue and the largest shareholder Investor will subscribe for its pro rata share. With the acquisition, Sobi aims to broaden the product portfolio with myelofibrosis treatment Vonjo and strengthen its presence in the US.
Pharma company Sobi provides treatments in haematology, immunology and niche indications. The company, listed on Nasdaq Stockholm, has approximately 1,600 employees across Europe, North America, the Middle East, Asia and Australia.
Sobi makes a bid for CTI Biopharma
In 2021, Sobi itself was subject to a takeover procedure. The American private equity firm Advent and the Singapore-based fund GIC made a bid for the company, corresponding to a market capitalisation of SEK 69.4 billion. However, AstraZeneca, which is one of Sobi’s largest shareholders, blocked the deal. This week, Sobi’s role shifted to being the acquiring party itself. This by making a bid for the American haematology company CTI Biopharma.
With a price tag of USD 1,7 billion (SEK 17.3 billion), the deal is intended to be financed through a rights issue later this year. In a separate press release, Investor announced that it supports the offer and has undertaken to subscribe for its pro rata share in the issue corresponding to SEK 2.9 billion.
The bid for CTI represents a premium of 95 per cent, which may indicate that Sobi was not the only bidder. CTI has unanimously approved the transaction and recommended its shareholders to accept the offer.
Wants to strengthen the pipeline with the JAK inhibitor Vonjo
In a press release, Sobi says that the acquisition complements the company’s existing haematology drug Doptelet, by adding the drug Vonjo (pacritinib). In 2022, CTI secured accelerated approval of Vonjo from the FDA for the treatment of the rare bone marrow cancer myelofibrosis.
While other JAK-class treatments have suffered from safety concerns, CTI has stated that Vonjo circumvents these by inhibiting only JAK2, IRAK1 and ACVR1, but not JAK1.
The market traded Sobi down following the news
As for Sobi’s bid for CTI, it remains to be seen whether the acquisition can affect the company’s profitability. Sobi believes that the acquisition will increase revenue growth and improve margins already in the short term, as Vonjo is in the commercial phase in the US. The drug sold for USD 53,9 million in 2022.
On the day of the announcement, Sobi’s share was trading down 14.5 per cent, after which the market capitalisation decreased from SEK 80.7 billion to SEK 69 billion. At the same time, CTI’s stock was trading up 83 per cent.
Has the tide turned for bigger deals?
Sobi’s bid for CTI does not in itself constitute a clear sign that risk appetite has turned in the market. However, this bid is not a singular event. As stated by BioStock earlier, between January and April this year, pharmaceutical companies announced deals worth a total of approximately USD 64 billion. When compared with the total deal volume of 2022, which totalled about USD 60 billion, it suggests that a more positive trend is in the making where large companies want to secure access to the next blockbuster drug. Read more here.