M&A

Bristol-Myers dodges a bullet as PTAB turns down inter partes review pitch for Celgene’s cash cow

Celgene just won another crucial patent skirmish in its ongoing fight to keep its blockbuster revenue pumping in from Revlimid — a key feature in the shaky $74 billion buyout deal that Bristol-Myers Squibb has been defending in a series of appearances over the last few days.

The Patent Trial and Appeal Board has denied a petition from Alvogen for an inter partes review of the Revlimid patents. That move comes a month after Dr. Reddy’s was also stiff armed.

Charles Bancroft

Alvogen has begun rolling out a generic version of Revlimid in certain small European markets in recent weeks, raising fresh questions about the durability of the franchise, which produced $9.7 billion of Celgene’s $15.2 billion in sales revenue last year — a whopping 64% of its total revenue.

Critics have noted that Bristol-Myers is buying into one of the great patent cliffs in all of biopharma and an IPR process right now would have raised serious concerns about accelerating the loss of patent protection. As it stands, analysts expect to see Revlimid to start facing off against cheaper generics in 2022, when Natco has a deal to begin limited marketing that steadily ramps up to a full scale campaign.

In the meantime, Bristol-Myers is betting that it can gain approvals on 6 late-stage drugs in Celgene’s pipeline — including ozanimod, JCAR017 and bb2121. But the tightrope walk is raising qualms that one misstep could cost the company dearly, with several observers wondering if an accident-prone Celgene team is setting up Bristol-Myers for a setback.

“When we got into more broader diligence, the first thing we looked at again was Revlimid IP, because a certainty of those cash flows were fundamental to our calculus in all of this,” said Bristol-Myers CFO Charles Bancroft in a Q&A with Barclays’ Geoff Meacham yesterday. Through it all, he maintained, Bristol-Myers took a more conservative approach than anyone to what Revlimid will being in.

Bristol-Myers executive team, led by CEO Giovanni Caforio, have been rattled by some outspoken opposition to the deal. After its largest investor turned against the buyout, they’ve been making their case for the M&A deal. But new questions have arisen related to the ozanimod patent that Celgene holds.

Today, the cards fells in Bristol-Myers’ favor. Its shares are down 2.2% in mid-morning trading.


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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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