Read Zacks_Analysts' blog in RSS
June 22, 2010
Share ThisRecently, Bristol-Myers Squibb Company (BMY) ended its collaborabotion deal with Exelixis, Inc. (EXEL) for the development and commercialization of cancer candidate XL184. Consequently all rights pertaining to XL184, Exelixis’ most advanced candidate, were returned to Exelixis. Bristol-Myers will make a payment of $17 million to Exelixis for closing the deal.
The two companies signed the deal in December 2008. Under the agreement, Bristol and Exelixis had originally agreed to certain development schemes and Exelixis retained key rights regarding timing and funding of current and future clinical trials.
Bristol-Myers had paid Exelixis $240 million under the agreement. This included a $195 million upfront cash payment and license payments of $45 million in 2009. However, Bristol terminated the agreement as the two companies failed to come to an agreement regarding the future development path of the candidate. The candidate is currently being studied in 13 types of tumor under multiple studies.
Bristol and Saladax ink deal
Recently, Bristol-Myers and Saladax Biomedical Inc., which develops diagnostic tests for the practical delivery of personalized medicine, entered into a multi-year development and commercialization deal for certain clinical diagnostic tests. The participants in the deal have agreed to collaborate globally for development and regulatory approvals. Furthermore, Saladax received exclusive global rights to commercialize the assays it develops.
The tests are expected to be used in combination with the development of certain therapeutic compounds in the pipeline of Bristol-Myers. However, the financial terms of the deal were not disclosed.
Our Take
Even though patent expirations loom large on Bristol in the near future, we believe the company has taken some measures to counter the loss of revenues resulting from the patent expirations of its key drugs, such as the Medarex acquisition, among others
The company intends to launch five compounds by 2012: apixaban, belatacept, brivanib, dapagliflozin and ipilimumab. The new launches are expected to drive growth in 2013 and beyond.
Currently we are Neutral on Bristol-Myers. Our Neutral stance indicates that the stock is expected to perform in line with the US equity market over the next six to twelve months. We advise investors to retain the stock over the time period.
Read the full analyst report on "BMY"
Read the full analyst report on "EXEL"
Zacks Investment Research