Looking to advance its biologics strategy, Bristol-Myers Squibb (NYSE:BMY) announced Monday that it will acquire Adnexus Therapeutics, a privately held developer of biologics, for $430 million in cash. This will strengthen the company's oncology research and development pipeline: Adnexus has a biologic for cancer treatment, Angiocept, that is in phase 1 clinical trials and is expected to begin phase 2 trials in the first quarter of next year.

The $430 million seems like a hefty price for one phase 1 drug, but Adnexus has a robust pipeline of preclinical compounds and its own protein design engine that should be able to churn out drug ideas faster than the scientists can test them.

With this move, Bristol-Myers joins a growing trend of large-cap pharmaceutical companies looking to develop biologic compounds in-house. Earlier this month, Pfizer (NYSE:PFE) said it was going to shift its focus to this area, hoping that future revenue sources will be more resistant to generic competition, given how difficult it is to try to copy biologics. Another recent example of one looking to restock its pipeline via the acquisition of a biotech is AstraZeneca (NYSE:AZN), which acquired MedImmune. These acquisitions should present an interesting challenge for traditional large-cap biotech companies such as Genentech (NYSE:DNA) and Amgen (NASDAQ:AMGN).

Bristol-Myers shares are up about 10% year to date. The stock carries a healthy annual dividend yield of 3.9%, but its price has stagnated in recent months. Bristol-Myers shareholders hope this push toward becoming more of a biopharma will translate into the stock price going up in the not too distant future.

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