The spate of acquisitions in the pharmaceutical industry continues with Bristol-Myers Squibb Company (BMY) purchasing the privately-held Amira Pharmaceuticals. The private entity targeted the discovery and early development of new therapies to treat patients suffering from inflammatory and fibrotic diseases. Pursuant to the closure of the deal, Bristol-Myers acquired Amira Pharma’s entire issued and outstanding shares of capital stock and stock equivalents.
At the time of announcing the deal in July 2011, Bristol-Myers stated that the all-cash deal was worth $325 million in addition to potential milestone payments upto $150 million. By acquiring Amira Pharma, Bristol-Myers enters the market for fibrotic diseases. The market is characterized by a high unmet need.
The acquisition boosts Bristol-Myers’ pipeline by adding Amira Pharma’s lead candidate AM152, which is being developed for treating idiopathic pulmonary fibrosis and systemic sclerosis. Moreover, the pre-clinical autotaxin program acquired by the pharma major following the acquisition has the potential to treat neuropathic pain and cancer metastases.
We note that Bristol-Myers has been looking to expand via acquisitions and partnerships to counter the loss of revenues that would arise following the genericization of its key drugs, including the blockbuster blood thinner Plavix. Plavix was co-developed with Sanofi-Aventis (SNY).
In June 2011, Bristol-Myers and Roche Holdings Ltd. (RHHBY) announced a collaboration for the development of a combination drug involving Roche’s vemurafenib and Bristol-Myers’ Yervoy to treat patients with BRAF-mutated metastatic melanoma (skin cancer).
In January 2011, Bristol-Myers inked a deal with Pharmasset, Inc., a clinical-stage pharmaceutical company, to develop a combination of two candidates, Bristol-Myers’ BMS-790052 and Pharmasset’s PSI-7977, for treating patients suffering from the hepatitis C virus. Both candidates are currently undergoing development.
In December 2010, Bristol-Myers inked a deal with Japanese company Oncolys BioPharma to acquire exclusive global rights to manufacture, develop and market festinavir which is being developed for treating HIV infected patients. Moreover, in October 2010 Bristol-Myers purchased ZymoGenetics.
Our Recommendation
We have a Neutral stance on Bristol-Myers. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We are also Neutral on Pfizer which carries a Zacks #3 Rank.
