This Analyst Thinks Blueprint Medicines' Non-Dilutive Funding 'Deflates M&A Speculation'

Today Blueprint Medicines Corp BPMC announced strategic financing agreements with Sixth Street and Royalty Pharma Plc RPRX for up to $1.25 billion, including $575 million upfront upon deal closure.
SVB Securities thinks the terms of the deals are fairly valued on the Sixth Street portion and favorable for Blueprint Medicines on the Royalty Pharma portion.
"In addition, these deals provide non-dilutive capital and independent validation by sophisticated investors, although we think this is largely counterbalanced by what may be perceived as deflating the likelihood of near-term strategic optionality for the company," the analyst writes.
As per the analysis, the Sixth Street Ayvakit deal is relatively neutral at first glance, but additional debt could make the deal less attractive.
For Royalty Pharma, SVB believes the transaction appears favorable for Blueprint Medicines.
"We think most investors did not view BPMC as having a short cash runway or needing financing...Therefore, we think that the impact on near-term strategic optionality, at a time when several acquisitions have been announced, and the bid/asks appear to be aligning, may disappoint some investors hoping for a larger transaction," the analyst notes.
Price Action: BPMC shares are down 0.90% at $51.74 during the market session on the last check Thursday.

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