Bristol-Myers Squibb Company (BMY) recently inked a deal with French biopharmaceutical company Innate Pharma S.A. for the development and commercialization of an anti-cancer antibody, IPH2102. The candidate is undergoing phase I studies. The deal encompasses all potential indications for the antibody.
Per the terms of the deal, the French company will grant Bristol-Myers exclusive global rights to develop, manufacture and commercialize the candidate and related compounds which block killer-cell immunoglobulin-like receptors (KIR) thereby encouraging the destruction of cancer cells.
The deal allows Bristol-Myers to fund the development of IPH2102. Moreover, the pharma major will make an upfront payment of $35 million to the French company in addition to payments based on the achievement of pre-specified development and commercial milestones plus royalty payments on approval. The terms of the deal allow Innate Pharma to continue developing IPH2102 in the acute myeloid leukemia (AML) indication until phase II studies are completed.
The deal is a positive for both companies. The association with a major player like Bristol-Myers is a big achievement for Innate Pharma. The deal will strengthen the French company’s balance sheet significantly.
We believe that the signing of the deal with Innate Pharma is another move by Bristol-Myers to counter the loss of revenues resulting from the genericization of its key drugs, including the blockbuster blood-thinner Plavix. Plavix has been co-developed with Sanofi-Aventis (SNY). Bristol-Myers is looking to combat the generic threat through deals and acquisitions and introducing new products to augment its product portfolio.
Our Recommendation
We have a Neutral stance on Bristol-Myers. The stock carries a Zacks #3 Rank (Hold rating) in the short run.
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