Deal valued at over $1 billion gives BMS worldwide rights in noncancer indications and ex-U.S. option in cancer.

Bristol Myers Squibb (BMS) will pay Alder Biopharmaceuticals $85 million up front for worldwide, exclusive rights to ALD518 in all nononcology indications. The deal also gives BMS an option to co-develop and commercialize ALD518 for oncology indications outside the U.S.

In addition to its up-front payment, Alder could receive another $764 million in development and regulatory milestones across a range of indications. Additional sales-based milestones could potentially top $200 million. As part of the deal BMS may also have to make a $20 million equity investment in Alder during an IPO.

ALD518, a humanized mAb against interleukin-6, has completed Phase IIa trials in rheumatoid arthritis and is in Phase II development in cancer and cancer supportive care.

“As part of our String of Pearls strategy, this transaction provides BMS with the opportunity to strengthen our immunoscience pipeline and leverage our company’s experience in developing and delivering novel biologics to help patients prevail over rheumatoid arthritis and potentially other autoimmune diseases,” remarks Brian Daniels, M.D., svp, global development and medical affairs at BMS. 

BMS embarked on its String of Pearls to complement and enhance the company’s existing internal capabilities through innovative drug development alliances and partnerships with or through the acquisition of relevant companies. To date this string of drug development partners includes Nissan Chemical Industries, Teijin Pharma, ZymoGenetics, Exelixis, PDL BioPharma, and KAI Pharmaceuticals.

The acquisition of Adnexus Therapeutics in October 2007 kicked off the String of Pearls initiative. The companies had been collaborating on the development and commercialization of adnectin-based therapeutics for cancer-related targets. Following on from the Adnexus takeover, in June 2008, BMS purchased Kosan Biosciences, a cancer therapeutics company with a collection of Hsp90 inhibitors. BMS’ largest String Of Pearls purchase was its $2.4 billion buy-out of Medarex this August.

Alliances initiated under the String of Pearls strategy have also shown progress. Last month BMS and ZymoGenetics reported positive final data from a Phase Ib trial of PEG-Interferon lambda administered with ribavirin in relapsed and treatment-naïve HCV patients. Also in October BMS and Exelixis reported Phase II data confirming the clinical activity of their XL184 in patients with glioblastoma mutliforme.

“The quest to bring new medicines to patients is a long and expensive one, and we recognize that we can’t do everything ourselves,” according to Elliott Sigal, M.D., Ph.D., CSO and president, R&D. “As a result, the company is constantly looking for selective transactions to expand our String of Pearls. At the same time, we are partnering some of our programs with other large companies, in a manner very similar to biotechnology companies, extending our commercial capabilities.”

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