Investors who have been waiting to see whether serial acquirer Pfizer would strike a megadeal for Bristol-Myers Squibb can cool it, one analyst says.
The Big Pharma isn’t interested in snagging its immuno-oncology rival, Citi analyst Andrew Baum wrote to clients in a note seen by The Fly, stressing that Pfizer CEO Ian Read made clear to him that the company doesn’t want Bristol unless it either brings along some transformational data or gets cheaper.
The thing is, however, one of those two things is bound to happen. BMS is waiting for validation of its PD-1/PD-L1-plus-CTLA4 combo strategy in first-line lung cancer, and that yea or nay would deliver Read's object of desire—one way or another.
After failing in first-line lung cancer with Opdivo as a monotherapy, the New Jersey drugmaker’s strategy hinges on the success of its Opdivo-Yervoy pairing, and investors are waiting with bated breath to see how that combo will stack up against an already successful PD-1-chemo marriage from Merck.
If the data come up positive, they could be transformational. If they don't, BMS will likely watch its shares plunge, making a deal cheaper.
And that's one reason analysts including Bernstein’s Tim Anderson have long speculated that, if Pfizer were interested, it would likely wait to make a move “until more clarity is gained on how the battle will shake out between ‘CTLA4 combo’ and ‘chemo combo.'”
“Having the value of the target change materially for the worse could make [Pfizer] management look bad,” he wrote last year.
That’s not to say the company will necessarily go for it even if Bristol does end up meeting one of those two criteria. In response to buyout questions from analysts, Read has repeatedly stressed his company’s commitment to its own immuno-oncology program, which it shares with Merck KGaA.
And Read isn’t one to go back on his word. Pfizer has “proven itself to be a very transparent company,” Anderson pointed out in a separate note last summer.
For now, investors will have to watch and wait—but it may not be that long now. Bristol recently unveiled top-line data for the Opdivo-Yervoy duo, and details from the trial are expected over the weekend at the American Association for Cancer Research annual meeting.