Bristol Myers (NYSE:BMY) Inks Deal on Their New Drug

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By Jacob Maslow

hepatitis virusIn a just released study, the combination of Sovaldi and Daklinza illustrated a 97% cure rate (sustained virologic response 12 weeks after treatment/SVR12).

Bristol-Myers Squibb (NYSE:BMY) stated that approximately 13,000 people in Canada suffer from both infections, representing 20% of the 65,000 with HIV and 5.2% of the 250,000 with HCV disease.

Meanwhile, Bristol-Myers entered into an agreement with Bavarian Nordic which provided it with an exclusive option to license and commercialize the latter’s Prostvac. Prostvac is a phase III prostate-specific antigen-targeting cancer immunotherapy in development of minimally symptomatic or asymptomatic metastatic castration for the treatment -resistant prostate cancer.

As per the provisions of the arrangement, Bavarian Nordic will receive an upfront payment of $60 million from Bristol-Myers. Bristol Myers can exercise the option within a designated time after data is available from the ongoing phase III trial.

If BristolMyers elects to exercise the option, Bavarian Nordic would be entitled to a payment of $80 million. Also, Bavarian Nordic will also receive incremental payments beginning from $50 million and with the possibility to exceed $230 million if Prostvac’s median overall survival benefit exceeds the efficacy viewed in phase II studies.

Aside from this, Bavarian Nordic could also receive regulatory benchmark ($110 million) and sales benchmark (up to $495 million) payments as well as tiered double digit royalties on future revenues of Prostvac.

We note Bristol Myers has been aggressively inking deals with health care businesses including Eli Lilly (NYSE:LLY) and Celldex Therapeutics, Inc. (NASDAQ:CLDX) among others.

As acquisitions and licensing deals in the highly lucrative immuno-oncology space continue to bring focus, we anticipate to see more such deals over the coming months.

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