Shares of 2seventy bio, Inc. TSVT gained 5.26% after the company announced a definitive merger agreement with Bristol Myers Squibb BMY.

Per the terms of the deal, BMY will acquire all of the outstanding shares of 2seventy bio for $5.00 per share in an all-cash transaction for a total equity value of approximately $286 million, or $102 million net of estimated cash. The deal represents an 88% premium to TSVT’s closing price of $2.66 on March 7, 2025.

Investors cheered the premium offered and shares gained another 3.56% in after-hours trading.

In the past year, shares of TVST plunged 40.8% compared with the industry’s 7.2% decline.

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More on TSVT’s Deal With BMY

2seventy bio’s board of directors has unanimously recommended that stockholders tender their shares in the offer commenced by BMY.

The acquisition is expected to be closed in the second quarter of 2025.

Meanwhile, certain stockholders of TSVT who own approximately 5.3% of the outstanding shares have entered into tender and support agreements, following which they have agreed to tender all of their owned shares in the offer.

Rationale Behind the TSVT, BMY Deal

TSVT came into existence after bluebird bio spun off its oncology portfolio and programs from its severe genetic disease portfolio and programs into a separate, publicly traded company.

However, TSVT has been facing challenges for quite some time now and is looking to maximize shareholder value.

We note that BMY and TSVT have an agreement in place, whereby both companies equally share profits and losses related to development, manufacturing, and commercialization of Abecma in the United States.

BMY is responsible for the manufacturing and commercialization of Abecma outside the United States.

Abecma is a B-cell maturation antigen (BCMA)-directed genetically modified autologous T cell immunotherapy indicated for the treatment of adult patients 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.

In April 2024, the FDA approved Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma after two or more prior lines of therapy.

However, in September 2024, TSVT and BMY announced the discontinuation of enrollment in their ongoing phase III KarMMa-9 study evaluating Abecma with lenalidomide maintenance versus lenalidomide maintenance alone in patients with newly diagnosed multiple myeloma who have suboptimal response to autologous stem cell transplant.

Earlier, TSVT had entered into an asset purchase agreement with Regeneron REGN to focus on the development and commercialization of Abecma.

TSVT sold all of the assets related to its solid tumor and other oncology and autoimmune cell therapy programs, including the bbT369 program in B-NHL, SC-DARIC33 in AML, MUC16 in ovarian cancer, MAGE-A4, autoimmune, and several unnamed targets to REGN.

This transaction closed in April 2024 and REGN assumed all of the ongoing program infrastructure and personnel costs related to these programs.

As a part of its strategic alignment, TSVT had earlier entered into an asset purchase agreement with Novo Nordisk NVO as well.

Per the terms of this agreement, NVO acquired TSVT’s program for the research, development, manufacture, regulatory approval, and commercialization of gene therapy products exploiting the megaTAL Platform, which is directed to the treatment, diagnosis and prevention of hemophilia.

TSVT’s Zacks Rank

TSVT currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 

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This article originally published on Zacks Investment Research (zacks.com).

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