#9 - Bristol-Myers Squibb

345 Park Ave.
New York, NY 10154-0037
Tel: (212) 546-4000
Fax: (212) 546-4020
www.bms.com

Headcount	28,402
Year Established	1887
Pharma Revenues	$18,808	+6%
Total Revenues	$18,808	+6%
Net Income	$5,602	+17%
R&D Budget	$3,647	+4%

2009 Top Selling Drugs
Drug	Indication	Sales	(+/-%)
Plavix	platelet inhibitor	$6,146	+10%
Abilify	schizophrenia	$2,592	+20%
Reyataz	HIV/AIDS	$1,401	+9%
Avapro	hypertension	$1,283	-1%
Sustiva	HIV/AIDS	$1,277	+11%
Baraclude	hepatitis B	$734	+36%
Erbitux	colorectal cancer	$683	-9%
Orencia	rheumatoid arthritis	$602	+37%

Account for 78% of total pharma sales, up from 75% in 2008.

 

PROFILE

Bristol-Myers Squibb continued its “next-generation biopharma” quest last year, spinning off its remaining non-pharma unit via limited IPO and pushing a slew of new potential blockbusters through the pipeline. Will they come up with enough new products to offset the loss of their biggest sellers? Not right away, and that’s the challenge facing new chief executive officer Lamberto Andreotti.

The Lowe Down Let us now mark another year of an independent Bristol-Myers Squibb! If you printed out all the various rumors and scenarios about who they’d merge with or be bought by over the last ten years, you’d have one long (and excruciating) read. Others fall, though, while they keep going on. The anticoagulant market has been very good to them, what with all that Plavix money coming in. But in 2012 the flow will stop, if you’ll pardon the expression. Apixaban might well be ready to pick things up by then if things go well, giving the company a long stretch of staying afloat by sharing cardiovascular revenues with someone else. But there’s no room for pride in this industry, or at least not any more. Those revenues will certainly be enough to go around if the market forecasts are anywhere near right. You could ask Bayer about that, though, since they had similar dreams about their own Factor X compound, and those don’t look to be quite fulfilled. Several other companies could chime in with anticoagulant stories that didn’t work out they way they were supposed to, either. I wish BMS luck on this one, but they should also hope that their oncology and immune pipelines deliver something, just in case. —Derek Lowe

Mr. Andreotti took over that role from James Cornelius in May 2010; the board elected to keep Mr. Cornelius in his role as chairman. Mr. Andreotti, 59, was previously president and chief operating officer, joining the company in 1998, so he’s seen some highs and lows at BMS. He has his work cut out for him, albeit not because of any mess left behind by his predecessor. BMS is simply facing the realities of being a mid-tier pharma company. It’s a tough role; your resources are constrained (relative to your big competitors), but you’re just as susceptible to The Patent Cliff as the big shots are. On top of that, you’re perennially seen as a takeover target. Some analysts believe that the company authorized a $3 billion stock buyback largely to whittle down its large cash on hand, making it a less attractive target.

The company’s strategy remains to double-down on developing new drugs, both internal and licensed, and make strategic acquisitions. In this era of diversification, genericization, and geographic breadth, BMS is relying on R&D to save the day. That hasn’t worked out too well for pharma these last few years, but it could pay off for BMS if its new slate of drugs reaches the market. It’s a big “if.” A few Phase III failures, and we’re looking at another Top 10 company disappearing from the board.

That’s because BMS’s biggest seller, Plavix, is expected to lose patent protection in the U.S. at the end of 2011. There’s already been some generic erosion for Plavix in Europe (which is more Sanofi’s worry than BMS’s), but U.S. sales have remained strong, up 13% in 2009 to $5.6 billion and 18% in 1Q10 to $1.5 billion. How is BMS going to make up the slack? They’ve already conceded that there’s no replacing Plavix. The company told investors and analysts in March of this year that income in 2013 will be between 9% and 13% lower than 2010’s projected levels, as the Plavix shortfall shakes out and Avapro sales slide. Abilify, the company’s second largest drug, is currently facing patent challenges from at least seven generic companies, but at press time is still protected until at least 2015.

Outsourcing News In June 2010, BMS signed strategic, three-year clinical development agreements with ICON and PAREXEL. The companies will provide BMS with global support for clinical studies to accommodate its “robust pipeline and significant inlicensing activity,” according to BMS. ICON and PAREXEL “will complement [BMS’s] internal high-performing capabilities and capacity with high-quality clinical development services from partners who can drive efficiency and cost savings,” read the statement, which also noted that ICON has worked with BMS for 10 years.

In July 2009, BMS bid approximately $2.3 billion to acquire Medarex, its development partner in ipilimumab, a melanoma biotherapeutic. The tender was completed in December. Medarex’s transgenic mouse antibody technology has been used in a number of marketed biologics — Simponi, Stelara, and Ilaris — providing BMS with a royalty stream to go along Medarex’s technology and its pipeline. BMS has high hopes for ipilimumab; the company recently released Phase III data showing that it’s the first drug that improves survival in patients with metastatic melanoma. The results look great; if they can mitigate the heavy-duty immune side-effects that beset some patients, they may have a blockbuster on their hands. (It’s also being tested against prostate and lung cancers.)

After a 2008 setback in a venous thromboembolism trial, BMS’s apixaban did so well in its a new Phase III study that BMS and development partner Pfizer shut down the trial early. The trial’s independent data monitoring committee determined that apixaban bestowed a “clinically important reduction” in stroke and systemic embolism in atrial fibrillation patients. The trial involved 5,600 patients who were at risk but intolerant or unsuitable for warfarin therapy. BMS brought in Pfizer as its development partner in 2007.

That was just around the same time BMS united with AZ to develop Onglyza, a treatment for type 2 diabetes. Onglyza was approved by the FDA in July 2009. It hasn’t set the world on fire, but it’s a DPP-4 inhibitor entering the post-Avandia diabetes market, and that means there’s plenty of caution among doctors. The companies are optimistic about its prospects, despite its lack of “overnight success.” Some analysts contend that “instant blockbusters” are a thing of the past (see Multaq, Effient, etc.), and that building a large franchise will take a lot more work in the current safety and reimbursement atmosphere.

Acquisition News Target: Medarex Price: $2.3 billion Announced: July 2009 What they said: “With its productive and proven antibody discovery capabilities, ability to generate interesting therapeutic programs and unique set of preclinical and clinical assets in development, Medarex represents what we’re looking for in terms of our String of Pearls strategy.” —James M. Cornelius, chairman and (then) CEO, BMS

BMS and AZ are also in Phase III trials with dapagliflozin, another type 2 diabetes treatment that performed well with Metformin, the generic standard treatment, and recently filed an NDA for a combo of Onglyza and Metformin.

Belatacept and brivanib comprise the other drugs that BMS hopes to launch by 2012 to put it in position for post-Plavix success (meaning, after the 2013 drop). Unfortunately, Belatacept faced a setback in May 2010 when the FDA sent BMS a CRL, asking for 12 more months of data from ongoing Phase III trials.

Brivanib, a cancer treatment, is a bit more perplexing. As recently as March 2010, the company included it among the five new drugs it will launch by 2012. At press time, BMS was still recruiting patients for several Phase III trials for brivanib — in combination with Erbitux for colon cancer, and in a number of liver cancer scenarios — so I think a 2012 approval is a bit of a longshot.

I have a soft spot in my heart for BMS. In the 10 years I’ve been compiling this report, they’ve really adopted the most naked make-or-break strategy I can recall.

 

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