Bristol-Myers Squibb is acquiring private US biotech Cardioxyl in a deal that could be worth more than $2 billion.

The drug giant said it is paying $300 million upfront and potentially a further $1.775 billion on the attainment of certain development, regulatory and sales-based milestones for the group.

The move strengthens BMS’ heart-failure offering with access to Cardioxyl’s lead candidate CXL-1427, a novel nitroxyl donor (prodrug) in Phase II clinical development as an intravenous treatment for acute decompensated heart failure (ADHF).

CXL-1427 works by releasing nitroxyl, which is known to have beneficial effects on heart muscle and vascular function. 

Preclinical and early clinical data show that the drug improves how the heart muscle contracts and relaxes without increasing heart rate or the demand for oxygen. This could give the drug a strong competitive edge, given that current ADHF therapies enhancing heart muscle function also boost heart rate and/or oxygen consumption and are linked with a higher risk for ischaemia, arrhythmias and increased mortality.

“The acquisition of Cardioxyl strengthens Bristol-Myers Squibb’s heart failure pipeline with a Phase II asset that has the potential to change the course of the disease rather than simply treating the symptoms,” said Francis Cuss, BMS’ chief scientific officer.

The transaction, which is expected to close in the fourth quarter and be dilutive to 2015 GAAP EPS by approximately $0.12, has been approved by both boards of directors.