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Drug Roundup - August 21, 2012
There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Bristol-Myers Squibb (BMY), AstraZeneca (AZN), Pfizer Inc. (PFE - Free Pfizer Stock Report), GlaxoSmithKline (GSK), and Watson Pharmaceuticals (WPI).
Bristol-Myers Squibb Completes Amylin Purchase
On August 8th, Bristol-Myers Squibb announced the successful completion of its $5 billion acquisition for diabetes drugmaker, Amylin Pharmaceuticals. Amylin’s top products include Byetta, Bydureon, and Symlin, which should add some depth to Bristol’s already impressive pipeline. In conjunction with the closing, Bristol-Myers will now enter into a partnership with AstraZeneca, in which AstraZeneca will pay $3.4 billion to co-develop and market Amylin’s products. Under the terms, profits and losses that arise from the collaboration are expected to be shared equally. All told, Amylin Pharmaceuticals is now a wholly owned subsidiary of Bristol-Myers Squibb.
Pfizer Links Up With AstraZeneca for OTC Nexium
On August 13th, Pfizer announced it had entered into a definitive agreement with AstraZeneca for the over-the-counter right to Nexium, a leading prescription drug approved for treating symptoms of acid reflux disease. Under terms of the deal, Pfizer would acquire the exclusive global rights to market Nexium for the approved over-the-counter indications. Pfizer would make an upfront payment of $250 million to AstraZeneca, in addition to future milestone and royalty payments based on product launches and sales. If approved, Pfizer would expect to start commercializing the product in the U.S. beginning in 2014, with launches in other markets likely to follow soon after.
GlaxoSmithKline Selling Brand Rights in Australia
On August 15th, the British drug giant announced it would be selling the rights to several of its older products in Australia to Aspen Pharmacare Holdings for roughly $270 million. The deal involves 25 products that GSK no longer promotes including its popular genital herpes medication Valtrex, and well-known antibiotics Amoxil and Timentin. In total, the 25 products generated sales of about $130 million in revenue in Australia last year, and nearly $50 million in the first half of 2012. Glaxo anticipates the deal will get done in the fourth quarter, pending the necessary regulatory approvals.
Watson Sues FDA Over Actos Ruling
On August 15th, Watson Pharmaceuticals filed a lawsuit against the Food and Drug Administration challenging a ruling against its generic version of popular diabetes drug Actos. Watson claims that despite following exact directions from the regulator, the FDA improperly denied the company’s shared market exclusivity on the product, which aims to keep other versions off the market for 180 days. This decision could keep Watson from selling the drug for up to six months, well past the company’s previously forecasted August 17th launch. On a positive note, management indicated that even with potential delays on Actos, Watson can still reach its full-year forecasts thanks to a favorable FDA update related to another product and improved conditions for several other generic drugs in the United States.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.