Bristol Myers-Squibb expands partnerships
In April 2007 Bristol-Myers Squibb began collaborating with Pfizer to develop the anticoagulant drug Apixaban. Terms of the agreement include an upfront payment of $250 million by Pfizer to Bristol-Myers. Pfizer will fund 60% of all planned development costs and Bristol-Myers will fund 40%. Bristol-Myers may also receive additional payments of up to $750 million based on development and regulatory milestones.
Discovered by Bristol-Myers Squibb, Apixaban is currently being studied in phase II and III trials for the prevention and treatment of a broad range of venous and arterial thrombotic conditions. Clinical trials comparing the drug with standard treatments have shown the drug to reduce deaths and clots in the legs and lungs of patients who have undergone orthopaedic surger. Last year the drug began to be tested in phase III trials for the prevention of strokes among people with atrial fibrillation, or irregular heartbeat. Should the trials be successful Bristol Myers-Squibb and Pfizer are hoping to file for US regulatory approval of Apixaban for prevention of venous thromboembolism in the second half of 2009, with filings planned for additional indications in 2010. If approved the drug could become a possible blockbuster replacement for Bristol's poorly tolerated but widely used medicine Coumadin (warfarin). A similar drug called Rivaroxaban, which is slightly further along in testing, is being co-developed by Bayer AG and Johnson & Johnson.
At the same time that the apixaban deal was signed, Pfizer and Bristol Myers-Squibb entered a separate research and development partnership focused on metabolic disorders using Pfizer's ongoing discovery programme directed towards diabetes and obesity. Pfizer is responsible for all research and early-stage development activities and will share responsibilities with Bristol Myers-Squibb for any phase III development and commercialisation activities. Under the agreement Bristol-Myers Squibb was to make an upfront payment of $50 million to Pfizer. All development and commercialisation expenses are to be shared bettween the companies together with profits/losses on a 60%-40% basis, with Pfizer assuming the larger share of both expenses and profit/losses.
Worth up to US$1 billion, Bristol Myers-Squibb's collaboration with Pfizer is seen by a number of analysts as a shrewd move on the part of Bristol-Myers Squibb to fend off a potential merger in the wake of its shaky financial status sresulting from ongoing patent lawsuits and government investigations for its best selling blockbuster blood-clot drug Plavix, and the ousting of its Chief Executive, Peter Dolan, in September 2006 because of his mismanagement of the patent negotiations over Plavix. More than a fifth of Bristol Myers-Squibb's revenue is at stake in the patent dispute over Plavix. Plavix was the world's second-bestselling medicine in 2005 with sales of US$5.9 billion.
The deal with Pfizer is one of a number Bristol Myers-Squibb has signed with other large pharmaceutical companies for primary care drugs in recent years. In 2004 Bristol Myers-Squibb signed a deal with Merck and Co for the co-development of the phase III antidiabetes drug Pargluva (muraglitizar), worth up to US$375 million in upfront and milestone payments. While the drug has subsequently failed, the deal brought Bristol Myers-Squibb US$100 million in upfront payments which helped defray some of the drug's development costs.
In January 2007 Bristol Myers-Squibb entered an agreement with AstraZeneca for two late-clinical stage diabetes drugs for diabetes type 2 which provides Bristol Myers-Squibb with an upfront payment of US$100 million and a further US$950 million if it achieves pre-commercial and sales milestones. Discovered by Bristol Myers-Squib the two drugs, Saxagliptin and Dapagliflozin, are currently in phase II and III trials. Should it complete clinical trials successfully, Saxagliptin will be filed for US regulatory approval during the first half of 2008 and could compete with Merck's recently approved diabetes drug Januvia and Novartis's Galvus, which has been held up by the FDA. Dapagliflozon, the drug in Phase II trials, is currently on track to be a first-in-class drug.
According to Roger Longman, the managing partner of Windhover Information, such deals by Bristol Myers-Squibb share more similarities with collaborative strategies pursued by biotechnology companies than traditional pharmaceutical companies. By selling off late-stage clinical products that have been taken to proof of concept and not taking them to market, Bristol Myers-Squibb can potentially unlock cash and value that otherwise would take years to accumulate. Rather than expending energy on marketing and sales the company is able to concentrate its efforts on discovery and early stage development to bolster its product pipeline.
It remains to be seen how successful its recent partnering strategy will be for Bristol Myers-Squibb and whether it will prevent a potential acquisition by Sanofi-Aventis which for the past few months has been discussing the possibility. For the partners of Bristol Myers-Squibb such alliances are valuable assets at a time of research set backs and increasing generic competition. The fact that companies like Pfizer and AstraZeneca are beginning to invest such huge sums of money in the discovery and early development efforts of companies like Bristol Myers-Squibb shows how desperate the competition is for big pharmaceutical companies to fill their product pipelines.
In the case of Pfizer the deal with Bristol Myers-Squibb could help fill the gap in its pipeline left by the halting of its phase III trials for Torcetrapib in December 2006 when a 60% increase in deaths was observed among patients taking the drug in the trial. Torcetrapib, a cholesterol-ester transfer protein inhibitor, was one of the costliest drugs to develop and was eagerly looked upon by Pfizer as a means of boosting its revenue once its blockbuster cholesterol lowering drug, Lipitor, which generates US$12 billion a year, loses US market exclusivity in early 2010. In May 2006 the Food and Drug Administration had also refused to approve a dosage of the insomnia drug Indiplon, a drug Pfizer had licensed to co-develop and market from Neurocrine Biosciences in 2002. Many within Pfizer were looking to the drug as a competitor for similar drugs already on the market, such as Ambien (Sanofi-Aventis) and Lunesta (Sepracor). The alliance with Bristol Myers-Squibb could provide a much needed boost to Pfizer which is currently cutting back 10,000 jobs, or 10 percent of its work force, and facing a great shake-up in its senior management team, with the resignation of its chief exectutive in October 2006 and its Head of Research and Development in May 2007 because of the Torcetrapib affair, and the exiting of it Chief Financial Officer in the wake of disclosures of corruption in the finance department of Pfizer India in May 2007.
AstraZeneca's collaboration with Bristol Myers-Squibb will significantly strengthen AstraZeneca's late stage pipeline and is an important tool for its externalisation strategy and pipeline refocus. The deal with Bristol Myers-Squibb, which could be worth over US$1 billion, is one of ten large partnering deals AstraZeneca has made since 2005 which by January 2007 had led to a total of US$1.6 billion upfront payments alone.
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