Partner? Pretty Please?
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Posted 7:42PM 06/01/12 Posted under: Investing
Bristol-Myers Squibb (NYS: BMY) CEO Lamberto Andreotti might call it a difference in opinion about how to proceed, but it's looking a lot more like a difference in pipelines.
Andreotti reportedly told investors at a conference yesterday that Bristol was still interested in continuing the development of its hepatitis C drug, daclatasvir, in combination with Gilead Sciences (NAS: GILD) GS-7977, but that Gilead isn't willing to play ball.
The combination produced beautifully in a phase 2 trial with early cure rates between 91% and 100%, depending on the strain of virus. Some of those patients might relapse, but considering the combination doesn't require Merck's (NYS: MRK) PegIntron or Roche's Pegasys, which have to be injected and carry unpleasant side effects, it's still outstanding data.
Why doesn't Gilead want to continue, then? The biotech has a drug, GS-5885, which is in the same class -- NS5A inhibitor -- as daclatasvir. Given the similarities, Gilead hopes to jump straight into phase 3 trials, testing GS-7977 with GS-5885. (Wonder if they'll call it GS-13862.) Assuming the in-house combo works, Gilead will get to keep all the revenue from the treatment rather than having to share it.
Bristol has a drug, INX-189, which it now calls BMS-986094, in the same class as GS-7977, from the acquisition of Inhibitex. I haven't seen any data combining the two, but Bristol's public announcement of its desire to partner with Gilead makes you think that there might be something wrong with BMS-986094. Of course, Johnson & Johnson (NYS: JNJ) agreed to test its hepatitis C drug TMC435 with BMS-986094, so there's at least one company that thinks it's a viable drug.
At this point it looks like Gilead has the upper hand in negotiations, especially as Bristol hasn't been playing its cards very close to its vest. If Bristol really wants to develop a combination of GS-7977 and daclatasvir, it'll probably have to give up some of the economics on the combination drug. If BMS-986094 turns out to be a $2.5 billion blunder, accepting only 30% to 40% of a joint venture wouldn't be the end of the world.
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At the time this article was published Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Gilead Sciences and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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http://www.dailyfinance.com/2012/06/01/partner-pretty-please/
Gilead's decision to keep all the profits for themselves has meant that I will die waiting for treatment. I'm sure I'm not alone. I can't take pegasys, don't have time to wait till these drugs are on the market and waited with bated breath for the results in April only to find my hopes lifted with the preliminary results of the 2 drugs together, then dashed, when my doctor told me that Gilead would be pulling the study I was to be in.
ReplyDeleteImagine how it feels to have hope, that finally there is a real chance a couple of drugs could give you a new lease on life and then discover that money is more important than your life. I'm assuming none of these greedy decison makers have cirrhosis or a family member with it, otherwise they would realize that you can't buy health and you can't take money with you. Thanks to Gilead I've learned this the hard way, and you can take that to the bank!
http://www.change.org/petitions/gilead-sciences-a-phase-iii-collaboration-for-the-treatment-of-hepatitis-c
ReplyDeleteThe above is link to petition "begging" Gilead & BMS to collaborate on these trials. If you or someone you know has HCV, please sign and share this petition.