Bristol-Myers Seeks Innovative Drugs
Bristol-Myers Squibb Co. will continue to seek out innovative drugs to buy, particularly for cancer, shrugging off two previous deals totaling $7.8 billion in the past 3 years that failed to pay off for them. The New York-based drug maker will target experimental treatments still in development, rather than commercial products that are already on the market, Chief Financial Officer Charles Bancroft said in an interview at the JPMorgan Chase & Co. healthcare conference in San Francisco.
Bristol-Myers said in November it was ending research in diabetes, hepatitis C, and neuroscience to put more resources into cancer. The new emphasis came after the company’s $5.3-billion purchase of Amylin Pharmaceuticals for its diabetes products, and the $2.5-billion hepatitis C deal for Inhibitex Inc. fell short. Last month, Bristol-Myers sold its diabetes business stake to partner AstraZeneca Plc for $4.3 billion.
“We have to take bets sometimes,” said Mr. Bancroft. “A really good company shows they can be adaptable and flexible to the environment they find themselves in at any given time.”
Strategically, Inhibitex was worth it because of the large market for hepatitis C, Mr. Bancroft said. “The risk-on, risk-off was enormous if that could have worked. Unfortunately it didn’t.” The company took a $1.8-billion charge in 2012 after Inhibitex’s drug was dropped for safety reasons.
The potential for the company’s diabetes medicines turned suddenly between the time that Bristol-Myers bought Amylin and last month, when it sold its stake of the portfolio to AstraZeneca. Amylin’s injections Bydureon and Byetta had sales of about $700 million under Bristol-Myers. Onglyza, which competes with Merck & Co.’s Januvia, saw slow sales as well.
Other large wagers have worked much better. A 2009 deal to buy Medarex Inc. for $2.4 billion has paid off handsomely, Mr. Bancroft said, calling it a grand slam. The purchase gave Bristol-Myers its first immune system-based cancer drug, Yervoy. The medicine is projected by analysts to sell $1.68 billion in 2016, and the immune system therapies have become the backbone of the company’s pipeline. Nivolumab is the company’s current leading cancer prospect. The immune system-based drug is being tested in lung, skin, kidney, and other cancers.
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