One of the top late-stage drugs Bristol-Myers wants in its $74B Celgene deal faces a ‘roadblock’ — analyst
Bristol-Myers Squibb has another big headache to fret about as it scrambles to rally investor support for its $74 billion acquisition of Celgene.
There’s been some buzz about a patent that Novartis holds on the dose-titration class patent to S1P modulators/agonists. And Credit Suisse analyst Vamil Divan has put that in the spotlight with a note saying the patent poses a threat to any commercialization work involving ozanimod — the big MS drug at Celgene that Bristol-Myers touts as a major reason for its $74 billion buyout bid.
Celgene $CELG had to take back their application after the FDA refused to file it a year ago, planning a makeover and resubmission in a matter of days. The EMA got their application package earlier this week. But the delay cost it the lead in a development race with Novartis, which the Basel-based pharma giant could win any day now.
The MS drug is one of the key late-stage assets that Bristol-Myers is buying in the deal and any threat to its IP would be just fresh fuel for the dissidents protesting the deal, a group led by Starboard Value, joined by Wellington — Bristol-Myers’ biggest investor — and supported by Loncar Funds and others grousing about the reasons for the deal.
Divan actually issued two notes on the topic, including a revision that followed a quick call from Bristol-Myers. The bottom line:
(W)e spoke with Bristol, which indicated it is aware of this class patent that we believe could be a roadblock to ozanimod commercialization, and they believe they will be able to manage through this hurdle and are not overly concerned about it.
The reason why Credit Suisse is concerned is because ozanimod relies on dose titration, unlike, say, Arena’s rival therapy $ARNA, which it says is a $4 billion opportunity — a pitch that has helped swell their share price.
Novartis, meanwhile, has been angling for a blockbuster OK for its rival S1P MS drug siponimod, which has posted good enough data to warrant the use of a priority review voucher to beat a short path to the FDA. The PDUFA date is set for this month — so look for word on that any time now. And analysts have pegged 2024 sales at $1.3 billion.
Celgene’s late-stage pipeline is the focus in the buyout because its big moneymaker, Revlimid, accounts for the lion’s share of company revenue. Once it goes over the patent cliff, you have to generate new revenue from the pipeline — a lot of revenue — to make up for it.