(Reuters) - Bristol-Myers Squibb Co (N:BMY) said it would buy privately held drugmaker Flexus Biosciences Inc for up to $1.25 billion (£811 million) to add an emerging class of cancer-fighting drugs to its pipeline.
The deal value includes $800 million in an upfront payment and up to $450 million of milestone payments, Bristol-Myers said in a statement on Monday.
Separately, Bristol-Myers also signed a deal with Rigel Pharmaceuticals Inc (O:RIGL) to develop a line of cancer therapies that can be used with Bristol-Myers's immunotherapy cancer drugs Opdivo and Yervoy.
Bristol-Myers will pay Rigel $339 million, including milestones, bringing the drugmaker's investment in cancer treatments on Monday to $1.59 billion.
Buying Flexus will give Bristol-Myers rights to an experimental cancer compound belonging to a class of drugs called IDO1-inhibitors, which work by disrupting mechanisms through which cancer cells hide from the body's immune cells.
Bristol-Myers currently has eight cancer compounds in various stages of development, four of which are designed to make the body fight cancer on its own. None of them are IDO-inhibitors.
Flexus's remaining assets, which are also cancer related, will be part of a newly formed company, Bristol-Myers said.
Bristol-Myers shares closed at $60.52 on Friday. They were untraded on Monday before the bell. Rigel's shares shot up 43 percent to $3.65 in premarket trading.