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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), Merck & Co. (MRK -Free Merck Stock Report), and Gilead Sciences Inc. (GILD).

Bristol-Myers Squibb to Enhance Latin American Presence

On February 12th, Bristol-Myers Squibb announced it had entered into a three-year collaboration agreement with Reckitt Benckiser to promote over-the-counter drugs in emerging Latin American Markets, particularly Mexico and Brazil. Key brands associated with the deal include Picot (antacid), Tempra (pain reliever and fever reducer), Micostatin (antifungal), Graneodin (cough and cold), Dermodex (anti-rash), Luftal (anti-gas), and Naldecon (cold and flu). Under terms of the agreement, Reckitt will pay Bristol-Myers an upfront payment of $438 million for the exclusive rights to sell, distribute, and market the aforementioned medicines for a three-year period. Bristol-Myers will retain responsibility for manufacturing all of the products covered under the collaboration, while Reckitt will purchase products from Bristol-Myers and pay royalties on product sales during the term. Reckitt will also pay an option fee in the amount of $44 million for the right to purchase these products outright at the end of the three years, acquiring the sales, marketing, and distribution rights, along with assets related to the products. The transaction is still subject to the customary closing conditions, including competition law authorizations in Brazil and Mexico.

Merck Partners up with Samsung Bioepis

Earlier this week, Merck and Co. announced it had entered into an agreement with Samsung Bioepis to develop and commercialize multiple pre-specified and undisclosed biosimilar candidates. With Samsung Bioepis’ biologic development and manufacturing capabilities, and Merck’s significant global commercial presence, the combination should position the two companies well to increase access to biosimilars in the coming years. Under the terms of the deal, Samsung Bioepis will be responsible for preclinical and clinical development, process development and manufacturing, clinical trials, and registration, while Merck will handle all commercialization. Although financial terms were not disclosed, the agreement specifies that Samsung Bioepis will receive an upfront payment from Merck, product supply income, and will be eligible for additional payments associated with clinical and regulatory milestones.

Gilead’s Hep-C Drug Shows Promise in Late-Stage Studies

On February 19th, Gilead Sciences announced that its Hepatitis C drug Sofosbuvir met its goal in a late-stage clinical trial. Results from the study showed that Sofosbuvir was clearly superior to historical cure rates at both 12 weeks and 16 weeks of treatment in patients who were not aided by prior therapy. This represented the fourth Phase III trial of the drug in which it has met its primary endpoint with no significant adverse events. With these positive results in hand, management at Gilead indicated it is on track to file regulatory applications in the United States and Europe in the second quarter. With current estimates pegging Hepatitis C treatments as a multi-billion annual market, approval of Sofosbuvir represents a substantial opportunity for Gilead. 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.