Bristol Myers to pay bluebird $200 million for future royalties on cancer therapies

(Reuters) – Bluebird bio Inc said on Monday Bristol Myers Squibb Co would give it a one-time payment of $200 million to buy out obligations for future royalties on sales outside the United States of two cancer therapies being developed by them.

The revised deal will provide bluebird capital without having to tap equity markets that have been hammered by the coronavirus outbreak.

The treatments, ide-cel and bb21217, are part of a class of drugs called CAR-T therapies that involve drawing white blood cells from a patient, processing them to target cancer cells, and infusing them back into the patient.

The companies will continue to equally share profits and losses in the United States, bluebird said.

Separately, bluebird reported a first-quarter net loss of $202.6 million compared with a loss of $164.4 million a year ago, and unveiled a business review to extend its cash runway into 2022 as the COVID-19 pandemic causes future uncertainty.

The company also said it was going to reduce the investment in building a U.S. commercial organization, and that its Chief Executive Officer Nick Leschly will decline nearly 100% of his salary for the next 12 months.

Shares of bluebird were up 8% at $64.40 before the bell, while Bristol Myers shares were down 1% at $60.36.

(Reporting by Manas Mishra and Vishwadha Chander in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr)