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Apr 6, 2009

BMS Shells Out $400M to Extend Revenue-Sharing Period with Otsuka for Abilify

  • Bristol-Myers Squibb (BMS) is paying $400 million up front to Otsuka Pharmaceutical to extend an agreement related to Abilify and to collaborate on oncology products Sprycel and Ixempra.

    Under the extension for Abilify, BMS will secure a portion of U.S. sales beyond the previously scheduled end date of November 2012 to April 2015, when the patent expires. The deal is structured such that BMS will gain a decreasing share from 2010 onward, while Otsuka will obtain more responsibility for commercial activities.

    Beginning January 1, 2010, BMS’ share will drop from the current 65% to 58%, then to 53.5% in 2011, and 51.5% in 2012. During these three years, Otsuka will pay 30% of expenses related to the commercialization compared to having no responsibility under the existing collaboration agreement.

    From January 1, 2013, until April 2015, BMS will receive 50% of net sales up to $2.7 billion and a declining tiered share of net sales above $2.7 billion. Otsuka will continue to be responsible for 50% of commercialization expenses.

    U.S. sales for 2008 were $1.67 billion, a 28% growth from 2007. Worldwide sales, which rose 30% over 2007, were $2.15 billion. BMS noted that Abilify was a key driver of revenue growth for the fourth quarter of 2008.

    Abilify is indicated as an add-on treatment to antidepressants for adults, for the treatment of manic and mixed episodes associated with bipolar I disorder in adults and in patients 10 to 17 years of age, as well as for the treatment of schizophrenia in adults and in adolescents 13 to 17 years of age.

    Additionally the companies’ partnership for Sprycel, a chronic myeloid leukemia therapy, and Ixempra, a breast cancer drug, will begin in 2010. Otsuka will share in commercial expenses and will co-promote in the U.S., Europe, and Japan. BMS will pay Otsuka a collaboration fee on aggregate annual net sales on a regressive tiering basis until 2020.

    Sprycel brought in $310 million in worldwide sales last year, almost doubling its 2007 numbers. Ixempra made $101 million, over four times as much as it made in 2007. In November, however, CHMP issued a negative opinion on the MAA for the treatment in metastatic breast cancer.

    “The agreement with our long-standing and valued collaborator Otsuka will help build our earnings base for 2013 and transition us to an expected period of growth in 2014 and beyond,” remarks Lamberto Andreotti, president and COO, BMS.



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