When Bristol-Myers Squibb picked up Celgene in one of biopharma’s biggest deals ever last month, investors tagged one big risk: Celgene’s megablockbuster Revlimid faced patent challenges that could take a big bite out of sales.
But the multiple myeloma drug has now dodged one threat. The U.S. Patent and Trademark Office tossed out Dr. Reddy’s bid to invalidate three patents, effectively ending this bid to launch generics before 2023, Leerink analyst Geoffrey Porges wrote in a note for investors. And the win for Celgene boosts the likelihood Bristol-Myers can close its deal as agreed last month, he wrote.
The patent office’s decision should position Celgene and BMS to strike a favorable settlement with Dr. Reddy's Laboratories, Credit Suisse Analyst Vamil Divan figures. Celgene has already settled with Natco Pharma in a deal that allows a limited generic launch in March 2022, he pointed out.
The PTO’s refusal “is very encouraging news for the Revlimid patent estate and more importantly for the ongoing court case against Dr. Reddy’s in which these patents are also challenged,” Divan wrote in an investor note. No trial date has been set in that case, the analyst wrote.
Bristol and Celgene inked their massive tie-up early this year, and at the J.P. Morgan Healthcare Conference, CEOs for the companies laid out their vision for the tie-up. Bristol’s CEO Giovanni Caforio told an audience the deal will create the leading oncology player, with top immuno-oncology treatments, plus other drugs for solid tumors and blood cancers.
The combined company would also be a top-five player in immunology and inflammation, he said, adding that he’s excited about the “doubling” of Bristol-Myers’ pipeline. Notably, he also praised the strengths of the merged drugmaker—even without Revlimid.
Celgene CEO Mark Alles said the deal will create a "preeminent global biopharmaceutical company” that’s a leader in cancer and a “scientific powerhouse.”
Despite the executives' confidence in the deal, investors had worried about an earlier-than-expected loss of exclusivity for Revlimid, which pulled in $9.7 billion last year. The drug generated nearly two-thirds of Celgene’s sales in 2018.