As AbbVie's ($ABBV) $21 billion deal to buy Pharmacyclics shows, drugmakers aren't scared to shell out for cancer drugs--and they're not worried about pricing pressure holding their purchases back. Could PD-1 pioneer Bristol-Myers Squibb ($BMY) be next?
Some analysts say it could. Many pharma-watchers see Bristol-Myers' checkpoint inhibitor Opdivo as the leader in immunotherapy--and that's a $40 billion market, according to Leerink Partners estimates. Opdivo already scored its second FDA approval, in record-breaking time, and Bristol could quickly expand the drug beyond its current melanoma and lung-cancer nods. With potential approvals in kidney, bladder, and head and neck cancers, Opdivo could vault beyond the $6 billion-plus in peak sales analysts already expect.
"Bristol has been a good takeover candidate for a long time," SSR analyst Richard Evans told Bloomberg. "The pipeline is undervalued."
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| Michael Giordano |
Success in bringing cancer drugs to market has made BMS "very, very confident in our ability to sustain our company as a freestanding company," said SVP for cancer drug testing Michael Giordano (as quoted by Bloomberg). But word has it that at least one deal-hungry competitor may have Bristol on its shopping list. The company's name has been buzzing around as a potential match for Pfizer ($PFE), which analysts expect to make a move even after its recent $17 billion pact for generic injectables specialist Hospira ($HSP).
Of course, AbbVie ponied up a price analysts deemed "lofty," "staggering" and even "astronomical," to snatch Pharmacyclics away from Johnson & Johnson ($JNJ) and other suitors. Companies interested in BMS may have to fork over quite the hefty sum if they want access to the likes of Opdivo and fellow immuno-oncology med Yervoy. But as Pfizer showed last year with its $118 bid for AstraZeneca ($AZN), it's not afraid throw down some serious dough.
After all, the $15 billion in peak sales Leerink analysts peg for Bristol's immunotherapies would look pretty good on Pfizer's top line--or any other company's, for that matter. And while Express Scripts ($ESRX) CMO Steve Miller--currently waging a war on hepatitis C drug prices--has said he sees opportunities to do the same with cancer, pharma execs aren't necessarily buying it.
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| AbbVie CEO Richard Gonzalez |
"Oncology is a different ballgame," AbbVie chief Richard Gonzalez told Bloomberg. "You're talking about life and death for these patients; it is not something you want to randomly start to manage in a way that would create risk for those patients."
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