NEW YORK - Bristol-Myers Squibb Co said on Tuesday it agreed to pay $85 million for the rights to an experimental rheumatoid arthritis drug being developed by privately held biotechnolgy company Alder Biopharmaceuticals Inc.
The deal is the latest in a series of small and mid-sized transactions aimed at preparing Bristol for the expected loss of revenue from Plavix, its top-selling blood-thinner, which loses patent protection in 2012.
The drug, ALD518, is a monoclonal antibody designed to soak up an inflammatory molecule known as interleukin-6 (IL-6) and prevent it from binding to the protein's receptor. It is in mid-stage development.
Alder will receive royalties on sales and be eligible to receive up to $764 million if the drug meets certain development goals in rheumatoid arthritis and other inflammatory conditions.
Bristol already sells the rheumatoid arthritis drug, Orencia, which generated sales of $434 million in the first nine months of this year, up 39 percent from the year earlier.
So far there are no RA drugs on the market that soak up the IL-6 protein, although a drug called RoActemra, or tocilizumab, made by Roche Holding AG, blocks the IL-6 receptor and prevents the protein from binding to it.
This drug should have superior efficacy and safety to anything that currently exists, including Orencia, said Jeremy Levin, a senior science executive at Bristol-Myers.
Orencia has been on the market since 2005.
Bristol also said it would make an equity investment of up to $20 million in Alder if the company sells shares in an initial public offering.
Randall Schatzman, Alder's chief executive officer, said the company will watch the market and assess the most appropriate time for an initial public offering. (Reporting by Toni Clarke; editing by Andre Grenon)