Boston Biomedical is a company with a focus on targeted cancer stem cells. This focus attracted the attention of Dainippon Sumitomo who is paying up to $2.63 billion to secure the company and more importantly rights to its two lead compounds BBI608 and BBI503.
However, investors in Boston Biomedical are going to have to wait for their cash as only £200 million is paid upfront with the balance trickling to investors if the drugs complete development, are successfully launched and then achieve agreed commercial milestones that require the drugs to reach mega-blockbuster status.
This is a tall order to deliver if investors are going to realize full value from the deal.
As such, the deal is a licensing deal dressed up as an acquisition, suggesting Dainippon see the value of the company in the lead drug candidates.
Dainippon originally licensed the regional rights to BBI608 in April 2011. This subsequent acquisition would suggest they liked what they saw post signature and decided to 'buy the company'.
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See this deal illustrated on the 2012 M&A Scorecard
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