With Celgene making the big move under Bristol-Myers Squibb’s umbrella, the drugmaker is looking to clear its books before the merger. Two antitrust settlements totaling more than $100 million could help soothe BMS’ mind.
Celgene will pay Mylan $62 million to settle claims that it intentionally stifled generic competition for its blockbuster multiple myeloma med Revlimid and predecessor Thalomid. The Big Biotech refused to sell samples of the two drugs to generics makers, the lawsuit said—and those samples are necessary for copycats to win FDA approval.
Without the samples, Mylan couldn't perform the bioequivalence testing necessary to formulate a generic and submit it to the FDA for approval. Mylan’s suit, filed in 2014, was scheduled for trial in October, according to an SEC filing.
Celgene chose not to comment on the settlement.
The Mylan settlement follows a separate $55 million payout to close a class-action lawsuit from the International Union of Bricklayers and Allied Craft Workers Local 1 Health Fund. In that case, the union claimed Celgene not only refused to sell Revlimid and Thalomid samples, but also filed superfluous patent challenges to protect its drugs and agreed to exclusive supply agreements to stem the flow of Thalomid’s active ingredient from other suppliers. Celgene approved that settlement a week ago.
Both settlements come as Bristol-Myers prepares to close the $74 billion buyout, announced in January. In late June, BMS agreed to sell psoriasis drug Otezla as part of an agreement with the FTC. The agency was concerned about the merged company cornering the psoriasis market.
The Otezla sale will likely delay the merger's approval until late 2019 or early 2020, rather than during Q3 as previously expected, Bristol-Myers said at the time.
Otezla, which hit $1.6 billion in global sales in 2018, was not considered one of the core assets in the merger, according to Credit Suisse analyst Vamil Divan, but it would have delivered some significant cash flow to the combined company's top line, and not every analyst agreed.
After word of the forced sale came down, the BMS-Celgene merger took fire from some market-watchers concerned about the drugmakers’ compatibility without Otezla.
SVB Leerink analyst Geoffrey Porges called the FTC's decision a negative surprise—and a big hit to the combined company’s psoriasis portfolio. While BMS-Celgene is expected to take a leading role in oncology, cardiovascular disease and hematology, Porges said, the loss of Otezla and continued patent expirations will put a damper on sales growth.
The merger will also likely put considerable pressure on late-stage pipeline drugs from Celgene, Porges noted, including luspatercept to treat myelodysplastic syndromes.