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Bristol-Myers Squibb (NYSE:BMY) is doubling down on its oncology ambitions with a deal that could reach $11.1 billion, partnering with BioNTech (NASDAQ:BNTX) to co-develop a next-generation cancer therapy known as BNT327. The German biotech will receive $1.5 billion upfront, $2 billion in staggered payments through 2028, and stands to gain another $7.6 billion if clinical and commercial milestones are met. Both companies will share development costs and future profits. The deal reflects growing urgency among pharma giants to replenish their pipelines, as legacy blockbusters face generic competition. Bloomberg Intelligence estimates this class of immunotherapy drugs could generate $60 billion annually by 2027.
BNT327's backstory adds intrigue. BioNTech originally licensed the compound from Chinese biotech Biotheus in 2023 before acquiring the company outright for up to $950 million. It's now positioning the therapy as a core asset in its oncology portfolio. While early trial data suggests Pfizer's competing drug may show stronger efficacy, BioNTech is further along in developing broader cancer indications. The approach behind these drugs is evolving fastmerging immunotherapy with anti-angiogenesis mechanisms to cut off tumors' blood and oxygen supply. This model gained traction after Akeso and Summit Therapeutics' combination therapy showed promising results against Merck's Keytruda in a major Chinese trial.
Still, the bar remains high. These new therapies haven't yet demonstrated a consistent survival advantage over standard treatments, and head-to-head data outside China could take years. For BioNTech, though, this deal marks a decisive return to its original focuscancerafter riding a pandemic-era wave with its COVID-19 vaccine. Bristol-Myers also gains optionality: the ability to pair BNT327 with other in-house experimental compounds. With both firms now locked into a shared bet on combo therapies, this could be a pivotal move in a rapidly shifting oncology landscape.
This article first appeared on GuruFocus.