Bristol-Myers (BMY) Partners Eisai for Antibody Drug Conjugate

·4-min read

Bristol-Myers Squibb Company BMY announced a global strategic collaboration agreement with Eisai. Both companies struck the deal to co-develop and co-commercialize MORAb-202, an antibody drug conjugate (ADC).

Per the terms of the pact, the companies will jointly develop and market MORAb-202 in the following collaboration territories of Japan, China, countries in the Asia-Pacific region, the United States, Canada, Europe including the European Union and the United Kingdom and Russia. While Bristol Myers will be solely responsible for developing and commercializing the drug in regions outside the collaboration territories, Eisai will be accountable for the manufacturing and supply of MORAb-202, globally.

Bristol Myers will pay $650 million to Eisai including $200 million as payment toward research and development expenses. Eisai is also entitled to receive up to $2.45 billion as potential future development, regulatory and commercial milestones.

The companies will share profits, research and development and commercialization costs in the collaboration territories. Bristol Myers Squibb will pay Eisai a royalty on sales outside the collaboration territories. While Eisai is expected to record sales of MORAb-202 in Japan, China, countries in the Asia-Pacific region, Europe and Russia, the company is entitled to the same in the United States and Canada.

MORAb-202 is composed of Eisai’s in-house developed anticancer agent farletuzumab and its in-house developed anticancer agent eribulin, using an enzyme cleavable linker. The candidate is currently being evaluated for FRα-positive solid tumors (inclusive of endometrial, ovarian, lung and breast cancers) in two studies, namely a phase I in Japan and a phase I/II program in the United States.

Both companies intend to move the candidate into the registrational stage of development as early as next year.

The collaboration will strengthen Bristol Myers’ position in the oncology space and complement its broad solid tumor portfolio.

Bristol-Myers’ shares have gained 6.4% year to date against the industry's decline of 1.3%.

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The company’s performance in the first quarter of 2021 was dismal as its immuno-oncology drug Opdivo’s sales declined facing stiff competition from the likes of Merck’s MRK Keytruda. Moreover, Revlimid sales weren’t impressive.

Nevertheless, the recent approval of new drugs adds a stream of revenues, which should propel growth in the coming quarters.

In March, the company and partner bluebird bio, Inc. BLUE secured the FDA approval for Abecma (idecabtagenevicleucel; ide-cel) as the first B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy for the treatment of adult patients with relapsed or refractory MM.

Last month, the FDA gave a nod to Zeposia (ozanimod) 0.92 mg for the treatment of adults with moderately-to-severely active ulcerative colitis (UC), a chronic inflammatory bowel disease (IBD).

Bristol-Myers currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Repligen Corporation RGEN, which presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Repligen’s earnings estimates for 2021 have increased to $2.21 from $1.91 in the past 60 days.

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