Bristol-Myers Squibb Company BMY announced that it has entered into two agreements (for late-stage HIV candidates, and for discovery and pre-clinical HIV candidates) with global HIV company, ViiV Healthcare, to divest its HIV pipeline. The deal is expected to close in the first half of 2016.
As per the terms of the agreement, Bristol-Myers will get upfront payments totaling $350 million, and potential development and regulatory milestone payments of up to $518 million for its late-stage HIV candidates; and up to $587 million for discovery and pre-clinical candidates. Additionally, the company will get tiered royalties once the candidates are approved. ViiV Healthcare will also pay sales-based milestone payments of up to $750 million for each late-stage candidate and up to $700 million for each of its discovery and pre-clinical candidates.
We not that Bristol-Myers retains rights to its marketed HIV drugs – Reyataz, Evotaz, Sustiva and Atripla.
How will ViiV Healthcare Benefit from the Deal?
The deal will add Bristol-Myers’ fostemsavir (BMS-663068, phase III – for heavily treatment experienced patients) and maturation inhibitors, BMS-955176 (phase IIb – for both treatment-naive and treatment experienced HIV patients) and BMS-986173, among others to ViiV Healthcare’s pipeline.
These candidates will complement ViiV Healthcare’s existing portfolio. The company plans to evaluate multiple opportunities for their development as combination therapies. We note that ViiV Healthcare, a company focused on the treatment of HIV, was established by GlaxoSmithKline GSK and Pfizer PFE in 2009. After certain amendments in Oct 2012, Shionogi joined as a shareholder.
Bristol-Myers currently carries a Zacks Rank #2 (Buy). A couple of other well-ranked stocks in the health care sector are Achillion Pharmaceuticals, Inc. ACHN and Pfizer. Achillion sports a Zacks Rank #1 (Strong Buy), while Pfizer carries the same rank as Bristol-Myers.
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