Subscribe Feed (RSS)Bristol-Meyers going BioTech
December 30th, 2008 | Sources: Wall Street JournalSubjects: Biotech, Pharmaceuticals
When Merck announced plans a few weeks back to open a BioTech production unit that would produce generic versions of protein-based drugs, some analysts worried that the new business model would be quite risky and expensive for the pharmaceutical giant.
Similar reasoning probably underlies Bristol-Meyers Squibb’s recent decision to pay Exelixis $240 million to develop 2 cancer drugs rather than acquire the troubled, mid-sized BioTech company.
In addition to the $240 million upfront, BMS forks over several hundred million dollars more if and when the compounds pass regulatory milestones and meet sales targets.
Last month Exelixis riffed 78 people—10% of its employees—and announced plans to focus exclusively on its most promising drug prospects including 2 known as XL184 and XL281.
The arm’s length deal makes sense for BMS which was looking to make a splash in oncology ever since it lost ImClone Systems in a bidding war with Lilly (BMS co-markets ImClone’s cancer fighter Erbitux in the US, receiving 61% of US sales for the honor).
XL184 and XL281 are 2 of 16 compounds developed by Exelixis since 1994. None has received FDA approval and only XL184 has reached human testing.
XL184 is furthest down the regulatory road as a treatment for thyroid cancer, but human testing for that drug is also underway for cancers of the brain and lung.
