Bristol-Myers Squibb Co. (BMY) and Allergan, Inc. (AGN) entered into an agreement to develop and commercialize AGN-209323, Allergan’s mid-stage pipeline candidate. AGN-209323 is being developed to treat neuropathic pain, or chronic pain usually accompanied by tissue injury.
AGN-209323 was discovered as part of collaboration between Allergan and ExonHit Therapeutics SA. The pain is common in people suffering from arthritis, cancer and nerve damage. The drug can be administered orally.
The deal would see Allergan granting Bristol-Myers exclusive global rights to develop, manufacture and commercialize AGN-209323 as well as backup compounds. Under the terms of the deal, Bristol-Myers would make an upfront payment of $40 million for the rights to the candidate.
Furthermore, Allergan stands to get another $373 million from Bristol-Myers in the event of AGN-209323 advancing through clinical development and regulatory review. Allergan would receive royalty payments from worldwide sales of the drug if it is approved by the regulatory authorities.
The deal includes all potential indications apart from ophthalmology indications for products formulated for local delivery to the eye, where Allergan retains certain rights. The addition of AGN-209323 is a welcome addition to Bristol-Myers’ neuroscience pipeline. AGN-209323, upon approval, would provide a wider range of choices to patients and go a long way in meeting the need for a more effective and tolerable treatment for neuropathic pain.
The transaction is subject to antitrust clearance by the United States Federal Trade Commission and Department of Justice, under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary regulatory clearances.
Currently, we are Neutral on Bristol-Myers Squibb. The recommendation implies that the stock is expected to perform in line with the overall U.S. equity market over the next six-to-twelve months. Therefore, we advise investors to retain the stock over this time period. We are also Neutral on Allergan.
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