Bristol-Myers in $50.5M deal with Five Prime

NEW YORK (AP) -- Drugmakers Bristol-Myers Squibb and Five Prime Therapeutics said Monday they will work together on experimental immune therapies for cancer.

The companies say they will study therapies that affect two targets in immune checkpoint pathways identified by Five Prime. Those therapies will be studied on their own or in combination with other Bristol-Myers drugs. The deal includes $50.5 million in upfront payments, an investment in Five Prime by Bristol-Myers Squibb, and research funding. Five Prime could receive as much as $300 million in future development, regulatory, and sales milestone payments per product, and it will get royalty payments on sales of any approved product.

Bristol-Myers Squibb will pay Five Prime $20 million up front and will invest $21 million in the South San Francisco, Calif., company. That will give it a 4.9-percent stake in Five Prime. It will also provide Five Prime with up to $9.5 million in research funding.

The companies said Bristol-Myers Squibb is paying a premium of about 30 percent for its stake in Five Prime. Shares of Five Prime Therapeutics Inc. rose $3.34, or 18.3 percent, to $22.18 in morning trading and reached an all-time high of $22.88.

Five Prime is a biotechnology company studying protein therapeutics intended to treat cancer and autoimmune diseases. It does not have any approved drugs. Five Prime went public in September with an IPO priced at $13 per share.

Shares of New York-based Bristol-Myers Squibb Co. picked up 50 cents to $54.50 in morning trading.