Bristol-Myers' cancer meds are $15B bait for a big, deal-hungry buyer

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."

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.

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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