Recently, Bristol-Myers Squibb Company (BMY) inked a deal with Japanese drug maker Ono Pharmaceutical Co. Ltd. The deal is aimed at expanding Bristol-Myers’ territorial rights for developing and commercializing the anti-PD-1 antibody (BMS-936558/ONO-4538).
The cancer candidate BMS-936558/ONO-4538 was generated following the deal inked in May 2005 between Ono and Medarex, Inc. (purchased by Bristol-Myers in 2009). Following the Medarex acquisition, Bristol-Myers got the rights to develop and commercialize the antibody in North America. Per the expanded deal, Bristol-Myers gets exclusive rights to develop and commercialize BMS-936558/ONO-4538 in the rest of the world. However, the rights to develop and commercialize the candidate in Japan, Korea and Taiwan remain with Ono.
The companies have also formed a strategic alliance for the joint development and commercialization of Bristol-Myers’ rheumatoid arthritis (RA) drug, Orencia in Japan. The deal includes the currently marketed intravenous version of the drug in addition to the subcutaneous formulation which is in late-stage development. The intravenous formulation was launched in Japan in September last year. Moreover, the deal covers all other additional indications for which Orencia may be approved.
We note that Bristol-Myers has been looking to expand via acquisitions and partnership deals to counter the loss of revenues that would arise following the genericization of its key drugs, including the blockbuster blood thinner Plavix. Plavix has been co-developed with Sanofi-Aventis (SNY).
Some recent deals include, the purchase of he privately-held Amira Pharmaceuticals in September 2011 and a collaboration with Roche Holdings Ltd. (RHHBY), entered into in June 2011. The deal with Roche pertains to the development of a combination drug involving Roche’s vemurafenib and Bristol-Myers’ Yervoy to treat patients with BRAF-mutated metastatic melanoma (skin cancer).
Similarly, In January 2011, Bristol-Myers inked a deal with Pharmasset, Inc., a clinical-stage pharmaceutical company, to develop a combination of Bristol-Myers’ BMS-790052 and Pharmasset’s PSI-7977 for treating patients suffering from the hepatitis C virus (HCV). Both candidates are currently undergoing development.
In December 2010, Bristol-Myers inked a deal with Japanese company Oncolys BioPharma to acquire exclusive global rights to manufacture, develop and market festinavir which is being developed for treating HIV infected patients. Moreover, in October 2010 Bristol-Myers purchased ZymoGenetics.
Our Recommendation
We have a Neutral stance on Bristol-Myers. The stock carries a Zacks #2 Rank (Buy rating) in the short run.
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