BMS, focused on immuno-oncology, turns Erbitux over to Eli Lilly

Erbitux is one of the top 10 best selling cancer drugs in the world and for years Bristol-Myers Squibb ($BMY) has sold it in the U.S. But Erbitux no longer fits in the sweet spot for Bristol-Myers which is hot for immuno-oncology right now and so is turning over marketing of the colorectal cancer drug to others. In the U.S. that is Eli Lilly ($LLY), whose ImClone unit developed the cancer drug and put the marketing deal in place before Lilly bought ImClone some years back.

Murdo Gordon

Bristol-Myers Squibb is "incredibly proud" of what it has accomplished with Erbitux in the 14 years it has been selling it, Murdo Gordon, head of worldwide markets, said in a statement, adding that the "agreement further aligns our oncology organization with our prioritized opportunities in immuno-oncology, across both solid tumors and hematologic malignancies."

The two drugmakers said today that Lilly will assume Erbitux marketing in the U.S., Canada and Puerto Rico, where it had sales last year of $723 million, up from $693 million the year before. Lilly also assumes full responsibility for manufacturing, although ImClone already makes the drug for the U.S. BMS spokesman Ken Dominski said that the company expects "a very small number of individuals" in the U.S. and Puerto Rico to be laid off as a result of the move.

The changeover, which comes after BMS sold the drug for 14 years, is expected to be complete in the fourth quarter, although BMS will receive tiered royalty payments into 2018. Bristol-Myers in February turned over marketing rights to the drug in Japan to Merck KGaA, where the two had shared that responsibility.

The move comes as Bristol-Myers Squibb, like others, has been putting much of its oncology focus, and lots of money, into immuno-oncology treatments that get the immune system to attack tumors, like its PD-1 inhibitor Opdivo. Recently approved to treat lung cancer after already being approved by the FDA for melanoma, Opdivo was recently put at the top of Thomson Reuters' blockbusters-to-be list for 2015, with a 2019 sales forecast of $5.68 billion.

As for Lilly, the company says it is nice to have Erbitux back in the fold. Lilly has been earning about $373 million from marketing arrangements for the drug for several years. If U.S. sales hold, Erbitux could now earn blockbuster numbers for the Indianapolis-based company. Sue Mahony, president of Lilly Oncology, said in a statement that "fully bringing Erbitux into the Lilly Oncology portfolio accelerates Lilly's commitment and leadership in gastrointestinal cancers to include an effective treatment for advanced colorectal cancer as well as head and neck cancer."

- here's the announcement (PDF)

Special Report: Top 10 best-selling cancer drugs of 2013 - Erbitux

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