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BioNTech (NASDAQ:BNTX) surged 20% after Bristol Myers Squibb (NYSE:BMY) agreed to license its bispecific antibody BNT327targeting PD-L1 and VEGF-Afor solid tumors in a deal worth up to $11.1 billion.
Under the agreement, BMY will pay a $1.5 billion upfront fee and $2 billion in guaranteed payments through 2028, with BioNTech eligible for up to $7.6 billion in milestones. Both companies will fund development and manufacturing costs equally and split global profits or losses. BNT327 is currently in a Phase 3 trial as a first-line treatment for extensive-stage small-cell and non-small-cell lung cancers, and a Phase 3 study in triple-negative breast cancer will launch by year-end. BMY and BNTX retain rights to pursue additional indications and combination regimens.
Street analysts applauded the collaboration. BMO Capital Markets' Evan David Seigerman noted that Bristol gains a next-generation molecule to potentially replace Opdivo, while BioNTech taps Bristol's global distribution and oncology development expertise. Raymond James' Sean McCutcheon added that the move shores up Bristol's mid- to long-term growth pipeline ahead of an anticipated Opdivo revenue gap post-2028.
Investors should care because this partnership accelerates BNT327's path to market with a Tier 1 oncology partner, de-risks late-stage development, and provides BioNTech with substantial non-dilutive capitalwhile Bristol secures a promising immunotherapy to bolster its portfolio.
With the first $1.5 billion payment already recognized, markets will focus on upcoming BNT327 Phase 3 readouts and any future milestone announcements that unlock the remaining $7.6 billion.
This article first appeared on GuruFocus.