Drug firms extend partnership

By Linda A. Johnson | April 7, 2009, Tuesday |

Print Edition

DRUGMAKER Bristol-Myers Squibb Co, seeking to bolster revenue during a crucial period, said yesterday that it has struck a deal with a Japanese partner to extend their partnership on one drug by two and a half years and to collaborate on two others.

New York-based Bristol-Myers and Otsuka Pharmaceutical Co are prolonging until 2015 a deal to share revenue and marketing costs for the blockbuster psychiatric drug Abilify, which Otsuka discovered.

That partnership was to end in November 2012, about six months after Bristol's top seller, blood thinner Plavix, gets generic competition.

Plavix had just under US$5 billion in sales last year and is one of the best-selling prescription medicines in the world.

Analysts and investors had been worried that Bristol-Myers revenue would fall sharply in 2013 as a result of the plunge in Plavix revenue.

The company said with the new moves, its earnings per share will be boosted by 30 cents each in 2013 and 2014. Bristol-Myers also confirmed its previous earnings forecast of US$1.58 to US$1.73 for this year and confirmed it expects earnings per share to grow by 15 percent, excluding charges, from 2007 through 2010.

Period of growth

"This is one of the more significant levers we can pull to improve our business outlook in 2013," said Bristol-Myers spokeswoman Tracy Furey.

Chief Operating Officer Lamberto Andreotti said in the statement the deal would help "transition us to a period of growth in 2014 and beyond."

The deal will help blunt the effects of Bristol-Myers' looming "patent cliff," Leerink Swann analyst Seamus Fernandez said in a note to investors.

Otsuka and Bristol-Myers have shared the marketing of Abilify since 1999. The drug is approved for schizophrenia, bipolar disorder and depression.

With the new agreement, the Abilify deal will run until it loses patent protection around April 2015. Officials would not say how much that would raise revenue from Abilify. It had about US$3 billion in global sales in 2008, 65 percent of which went to Bristol-Myers, which also bore all marketing and continuing research costs.

The two firms also agreed to share revenue and marketing and further development costs for two Bristol cancer drugs, Sprycel and Ixempra.

Manufacturing

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Drug firms extend partnership

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