Never Mind That IPO–Adnexus Acquired by Bristol-Myers Squibb

9/25/07

Just a month after filing for an $86 million IPO, and less than two months after raising $15.5 million in a Series C financing round, Adnexus Therapeutics announced yesterday that it is being acquired by Bristol-Myers Squibb (NYSE: BMY). Under the terms of the deal Adnexus, which develops biologic therapeutics derived from the protein fibronectin, will net $415 million in cash and will be eligible for another $75 million in milestone payments. The Waltham-based firm will remain where it is, as a subsidiary of BMS.

Noubar Afeyan, managing partner and CEO of Flagship Ventures (which contributed the largest share of the $70.5 million in venture funding raised by Adnexus) says that the acquisition “follows a series of prior deals where Pharma companies acquire biotechs with proprietary product platforms to strengthen their pipelines.” Both Afeyan (an Xconomist) and Amir Nashat, a general partner at Polaris Venture Partners—another Adnexus investor—say that the trend is particularly strong in the protein therapeutics arena.

Adnexus and BMS began collaborating in February, when the firms announced a deal to use Adnexus’ patented protein-design system to supply BMS with oncology product candidates. According to Nashat, “This collaboration proceeded extremely well both technically, as well as in the people dimension, as the mutual respect and regard between the two groups of scientists continued to build.” Afeyan says that “BMS has signaled a growing commitment to biologics for a while,” including building a manufacturing plant in Devens, MA.

So what about the IPO filing? Was Adnexus serious about going it alone or, as PEHub’s Dan Primack suggested in August, was the company really trying to position itself for an acquisition all along? Afeyan and Nashat both insist on the former. “Adnexus had taken all the necessary steps and was committed to the IPO process, and had every confidence that it could mature its technology and products in the context of a stand-alone business,” says Nashat. Still, says Afeyan, the BMS deal has its advantages. “The acquisition provides far greater resources for the company’s platform to be expanded and utilized to produce multiple therapeutic products. In addition, the shareholders are rewarded at a valuation that is likely higher than an IPO would produce in the short term.”

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