Gil Roth07.18.12
#10 Bristol-Myers Squibb Co.
345 Park Ave.
New York, NY 10154-0037
Tel: (212) 546-4000
Fax: (212) 546-4020
www.bms.com
Headcount 27,000
Year Established 1887
Pharma Revenues $21,244 9%
Total Revenues $21,244 9%
Net Income $5,260 17%
R&D Budget $3,839 8%
Top-Selling Drugs
Account for 82% of total pharma sales, down from 83% in 2010
PROFILE
Bristol-Myers Squibb entered the post-Plavix era in May 2012, as its far-and-away top seller lost patent protection. Unlike most other branded-to-generic shifts, this one doesn’t involve a six-month exclusivity period for a single generic marketer, thanks to Apotex’ hijinks in 2006. With at least seven companies jumping into the Plavix pool, we can expect a pretty massive drop in overall revenues for BMS — think 15% or more — in 2012.
BMS has been preparing for this eventuality for years. Like the rest of its cohort, the company shrank its cost structure significantly over the years. Unlike most of its competitors, however, it actually has a number of up-and-coming drugs that may help it get through this rough patch without becoming M&A fodder.
In last year’s report, we mentioned the approval of melanoma treatment Yervoy and pending applications for Nulojix. The biggest NDA is still pending: Eliquis, the blood-thinner BMS is co-developing with Pfizer. That drug will go up against Boehringer Ingelheim’s Pradaxa, a drug that nearly reached $1 billion in revenues in its first full year. Eliquis has demonstrated superior risk-reduction beside Pradaxa (and Xarelto), and some estimates are that BMS and Pfizer may be splitting $4 billion in sales at Eliquis’ peak.
In June 2012, BMS and Pfizer received a complete response letter for Eliquis for its initial NDA for prevention of stroke and systemic embolism in patients with atrial fibrillation. Eliquis is already on the market in the EU, but posted less than $1 million in sales in 2011. The CRL doesn’t require new studies, requesting only “additional information on data management and verification from the ARISTOTLE trial,” according to a joint statement from the companies. There’s no word on what timeframe that puts Eliquis on.
BMS managed to get its diabetes treatment, Onglyza (and Kombiglyze, its metformin-combo) rolling in its second full year, posting revenues of $473 million (shared with AstraZeneca). That’s nothing to sneeze at, but it’s not Januvia. Also, BMS and AZ may have to surrender on another diabetes collaboration, after the FDA asked for more clinical data for dapagliflozin in a complete response letter in January 2012.
However, it’s been more good news than bad for BMS’ development and commercialization efforts. The company’s seen very good results with Yervoy, which reached $360 million in revenues in its partial first year. It posted revenues of $154 million in 1Q12, nearly doubling the results of 1Q11. In addition, Baraclude, Orencia and Sprycel have shown strong double-digit gains, yielding a series of blockbusters.
BMS isn’t resting on its laurels. The company spent an aggressive $2.5 billion to acquire Inhibitex and lock up a promising hepatitis C treatment currently in Phase II. The price tag reportedly rose by 30% to block an unnamed suitor. Apparently, BMS first tried to buy the clinical compound itself for $550 million in October 2011, but things escalated quickly, really getting out of hand fast. Still, it was a relative bargain, after Gilead spent $11 billion to acquire Pharmasset several months earlier.
The Inhibitex acquisition came mere days after Jeremy Levin, BMS’ senior vice president of strategy, alliances and transactions, left the company to take the top role at Teva. Mr. Levin had been responsible for implementing BMS’ “string of pearls” acquisition and licensing strategy, a role that will now be handled by chief executive officer Lamberto Andreotti and chief scientific officer Elliott Sigal. We haven’t seen any speculation that his departure prompted the company to raise its bid, but it’ll be interesting to see whether their acquisition strategy is as effective in future.
Mr. Levin did a great job of helping position BMS to survive life after Plavix and Avapro, and the company overall seems to have a good perspective on the limits of its R&D capabilities and the importance of leveraging its assets. The next two years will be tough as they rebuild, but they’ll finish that stretch a lot happier than some of their mega-competitors.
As we go to press: BMS/AZ buys Amylin
345 Park Ave.
New York, NY 10154-0037
Tel: (212) 546-4000
Fax: (212) 546-4020
www.bms.com
Headcount 27,000
Year Established 1887
Pharma Revenues $21,244 9%
Total Revenues $21,244 9%
Net Income $5,260 17%
R&D Budget $3,839 8%
Top-Selling Drugs
| Drug | Indication | $ | (+/- %) |
| Plavix | platelet inhibitor | $7,087 | 6% |
| Abilify | schizophrenia | $2,758 | 8% |
| Reyataz | HIV/AIDS | $1,569 | 6% |
| Sustiva | HIV/AIDS | $1,485 | 9% |
| Baraclude | hepatitis B | $1,196 | 28% |
| Avapro | hypertension | $952 | -19% |
| Orencia | rheumatoid arthritis | $917 | 25% |
| Spryce | leukemia | $803 | 39% |
| Erbitux | oncology | $691 | 4% |
Account for 82% of total pharma sales, down from 83% in 2010
PROFILE
Bristol-Myers Squibb entered the post-Plavix era in May 2012, as its far-and-away top seller lost patent protection. Unlike most other branded-to-generic shifts, this one doesn’t involve a six-month exclusivity period for a single generic marketer, thanks to Apotex’ hijinks in 2006. With at least seven companies jumping into the Plavix pool, we can expect a pretty massive drop in overall revenues for BMS — think 15% or more — in 2012.
BMS has been preparing for this eventuality for years. Like the rest of its cohort, the company shrank its cost structure significantly over the years. Unlike most of its competitors, however, it actually has a number of up-and-coming drugs that may help it get through this rough patch without becoming M&A fodder.
In last year’s report, we mentioned the approval of melanoma treatment Yervoy and pending applications for Nulojix. The biggest NDA is still pending: Eliquis, the blood-thinner BMS is co-developing with Pfizer. That drug will go up against Boehringer Ingelheim’s Pradaxa, a drug that nearly reached $1 billion in revenues in its first full year. Eliquis has demonstrated superior risk-reduction beside Pradaxa (and Xarelto), and some estimates are that BMS and Pfizer may be splitting $4 billion in sales at Eliquis’ peak.
In June 2012, BMS and Pfizer received a complete response letter for Eliquis for its initial NDA for prevention of stroke and systemic embolism in patients with atrial fibrillation. Eliquis is already on the market in the EU, but posted less than $1 million in sales in 2011. The CRL doesn’t require new studies, requesting only “additional information on data management and verification from the ARISTOTLE trial,” according to a joint statement from the companies. There’s no word on what timeframe that puts Eliquis on.
BMS managed to get its diabetes treatment, Onglyza (and Kombiglyze, its metformin-combo) rolling in its second full year, posting revenues of $473 million (shared with AstraZeneca). That’s nothing to sneeze at, but it’s not Januvia. Also, BMS and AZ may have to surrender on another diabetes collaboration, after the FDA asked for more clinical data for dapagliflozin in a complete response letter in January 2012.
However, it’s been more good news than bad for BMS’ development and commercialization efforts. The company’s seen very good results with Yervoy, which reached $360 million in revenues in its partial first year. It posted revenues of $154 million in 1Q12, nearly doubling the results of 1Q11. In addition, Baraclude, Orencia and Sprycel have shown strong double-digit gains, yielding a series of blockbusters.
BMS isn’t resting on its laurels. The company spent an aggressive $2.5 billion to acquire Inhibitex and lock up a promising hepatitis C treatment currently in Phase II. The price tag reportedly rose by 30% to block an unnamed suitor. Apparently, BMS first tried to buy the clinical compound itself for $550 million in October 2011, but things escalated quickly, really getting out of hand fast. Still, it was a relative bargain, after Gilead spent $11 billion to acquire Pharmasset several months earlier.
The Inhibitex acquisition came mere days after Jeremy Levin, BMS’ senior vice president of strategy, alliances and transactions, left the company to take the top role at Teva. Mr. Levin had been responsible for implementing BMS’ “string of pearls” acquisition and licensing strategy, a role that will now be handled by chief executive officer Lamberto Andreotti and chief scientific officer Elliott Sigal. We haven’t seen any speculation that his departure prompted the company to raise its bid, but it’ll be interesting to see whether their acquisition strategy is as effective in future.
Mr. Levin did a great job of helping position BMS to survive life after Plavix and Avapro, and the company overall seems to have a good perspective on the limits of its R&D capabilities and the importance of leveraging its assets. The next two years will be tough as they rebuild, but they’ll finish that stretch a lot happier than some of their mega-competitors.
As we go to press: BMS/AZ buys Amylin
In a deal announced in July 2012, Bristol-Myers Squibb will buy Amylin Pharmaceuticals for approximately $5.3 billion. BMS will also take on $1.7 billion in Amylin’s net debt and a contractual payment obligation to Lilly, making a total transaction of $7 billion. Amylin’s primary focus is on the research, development and commercialization of a franchise of GLP-1 agonists, for the treatment of type 2 diabetes. BMS’ buyout price rose 41% from its initial bid earlier this year.
Once the deal is complete, AstraZeneca will pay BMS $3.4 billion in cash to extend the companies’ diabetes collaboration. Profits and losses arising from the collaboration will be shared equally. In addition, AZ will have a $135 million option to establish equal governance rights over “key strategic and financial decisions” regarding the collaboration.
“Amylin’s innovative diabetes portfolio, talented people and state-of-the art manufacturing facility complement our long-standing leadership in metabolics,” said Lamberto Andreotti, chief executive officer, BMS. “We are pleased to be able to strengthen the portfolio we have built to help patients with diabetes by building on the success Amylin has had with its GLP-1 franchise. The acquisition of Amylin by BMS is also a unique way for BMS and AZ to expand the alliance between the two companies, and it demonstrates BMS’ innovative and targeted approach to partnerships and business development.”
Simon Lowth, AZ’s interim chief executive officer, added, “This is a compelling proposition that will have an immediate positive impact on revenues and is fully in line with our stated partnering strategy to enhance top-line growth and strengthen our late stage pipeline. The broadening of our diabetes collaboration with BMS is another important step towards creating a leadership position in the treatment of a disease with growing unmet medical need that is reaching epidemic proportions in many areas of the world. The combined development, regulatory and commercial strengths of the AZ and BMS alliance for diabetes provides an excellent platform to unlock the potential of Amylin’s differentiated treatments for the benefit of patients worldwide and for our shareholders.”
Amylin’s main product is Byetta, a twice-daily injectable GLP-1 treatment for type 2 diabetes that generated $518 million in 2011 sales. Amyline received approval for a weekly version, Bydureon, in January 2012, after several regulatory delays. Metreleptin, a leptin analog, is under review at the FDA for the treatment of diabetes and/or hypertriglyceridemia.
In November 2011, Amylin and Lilly dissolved their diabetes alliance, after Lilly formed a development and commercialization pact with Boehringer Ingelheim.
ACQUISITION NEWS
The Lowe Down
Bristol-Myers Squibb has entered the No-Plavix Zone, but it actually seems to have a decent development pipeline to try to deal with the situation. Seeing them as a big monoclonal antibody player is going to take some mental adjustment, but that’s what they might turn out to be.
Their progress over the last few years illustrates a problem that all of us have when we look over this business: the fact that progress takes years. It all happens a bit too slowly for the eye to notice; it’s like watching the minute hand, when what our brains can handle is the sweep of the seconds. The write-ups about BMS have, over the last 10 years, varied from “Impending Doom!” to “Must Merge, Now!” to “Might Be Able to Make It” and are now somewhere around “Hey, Not So Bad At All”.
Problem is, time scale doesn’t just confuse outside observers; it confuses people inside a company, too. How many people inside the BMS management, do you think, have been carefully working out a multiyear master plan that’s just now coming to fruition? (OK, how many of them think that they have?) But it’s next to impossible to really work that way.
—Derek Lowe
ACQUISITION NEWS
Target: Inhibitex
Price: $2.5 billion
Announced: January 2012
What they said: “Bristol-Myers Squibb continues to drive advances in the field of hepatitis C R&D through internal development and selective partnerships. The addition of Inhibitex’s nucleotide polymerase inhibitor to our own promising portfolio, which includes other direct-acting antivirals, brings additional options to develop all-oral regimens with better cure rates, shorter duration of therapy and lower toxicity than the current standard of care.”
—Elliott Sigal, executive vice president,
chief scientific officer and president, R&D, BMS
Target: Amira Pharmaceuticals
Price: $325 million, with $150 million in milestones
Announced: July 2011
What they said: “As part of the continued execution of our focused biopharma strategy, BMS has identified fibrotic diseases as an area of high unmet medical need that complements our research efforts in several of our therapeutic areas. This acquisition represents the latest example of our String of Pearls strategy, a highly targeted set of transactions designed to enrich our innovative pipeline with potential medicines to help patients in need.”
—Elliott Sigal, executive vice president,
chief scientific officer and president, R&D, BMS
Outsourcing News
In August 2011, BMS selected ICON as a preferred provider for full-service clinical pharmacology and exploratory clinical studies. ICON already provided global support for BMSâ clinical development pipeline, per the companies' June 2010 agreement. ICON will provide a broad range of early phase services from its Clinical Pharmacology Units in San Antonio, TX, Omaha, NE, and Manchester, UK, as well as scientific services such as protocol design and development, project management, clinical monitoring, medical monitoring/pharmacovigilence, data management, biostatistics, pharmacokinetics and medical writing.
Into every outsourcing news, a little insourcing must fall. BMS sources its bulk material for Orencia from an outside provider and finishes the product in its own facilities for both formulations. In May 2012, the FDA approved BMS' biologics facility in Devens, MA to produce Orencia, so it looks like some of that bulk supply's going to be in-sourced (keeping a CMO in order to maintain supply security). Lou Schmukler, president, Global Manufacturing & Supply at BMS, commented, "The increased manufacturing capacity from the Devens site will support market demand for Orencia and positions us well for future production of additional biologic medicines."
BMS outsources bulk and final dosage form for Yervoy, another biologic. No word if that one's going to be shifting to Devens, too.
