Bristol-Myers Squibb Co. (BMY), Monday, announced a three-year extension to its agreement to develop and market Tokyo-based Otsuka Pharmaceutical Co., Ltd.'s antipsychotic drug Abilify, or aripiprazole. Bristol-Myers also announced a collaboration deal with the Japanese company to market its cancer products from 2010 onwards, as well as confirmed its earlier-provided earnings guidance for fiscal 2009.
The New York-based biopharmaceutical company Bristol-Myers extended the U.S. portion of their long-standing deal on Abilify from the currently scheduled end date of November 2012 until the expected loss of exclusivity in April 2015.
The extension agreement is seen to give the company some relief at the time of losing the exclusivity of its anticlotting drug Plavix in 2012. This drug, which is co-marketed with Sanofi-Aventis (SNY), was attributed by the company for leading its top-line growth in the fourth quarter.
On the other hand, Abilify generated over $2 billion in sales last year, which has made it the second best-selling drug for Bristol-Myers behind Plavix.
Lamberto Andreotti, Bristol-Myers' president and chief operating officer, said, 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.
Under the terms of the agreement, Bristol-Myers will make a $400 million cash payment up front to Otsuka.
Beginning from January 2010, the company's share of the Abilify sales will drop yearly from 65% currently to 58% in 2010, 53.5% in 2011, and 51.5% in 2012. During the period 2010 to 2012, Otsuka will take over 30% of the marketing expenses, which is a shift from the prior agreement of having no responsibility.
From 2013 to 2015, Bristol-Myers Squibb will receive 50% of the net sales up to $2.7 billion, as well as a declining tiered share of net sales above $2.7 billion. During this period, 505 of the marketing expenses will be borne by Otsuka.
The companies also agreed to collaborate on two of Bristol-Myers Squibb's oncology products - Sprycel, or dasatinib, and Ixempra, or ixabepilone, commencing from 2010. Under this deal, Otsuka will help Bristol-Myers to co-promote Sprycel in the U.S., Japan, and major EU markets, as well take a share of the commercial expenses incurred in these countries related to the two products.
In return, Bristol-Myers will pay Otsuka a partnership fee on the aggregate annual net sales of the two products from 2010, which will be calculated on a regressive tiering basis till 2020.
In addition, Bristol-Myers confirmed its earnings guidance for fiscal 2009, of GAAP earnings to be $1.58-$1.73 per share and non-GAAP earnings to be $1.85-$2.00 per share. On average, 16 analysts polled by Thomson Reuters currently expect the company to earn $1.92 per share for the year. Analysts' estimates typically exclude special items. Meanwhile, 13 Wall Street analysts have a consensus revenue estimate of $ 21.57 billion for the current year.
The company also backed its expectations of 15% non-GAAP earnings per share CAGR in 2007-2010, and a minimum $0.30 accretion in 2013 and 2014.
Early last month, Bristol-Myers announced a deal with Japan-based Nissan Chemical Industries, Ltd. (NNCHF.PK) and Teijin Pharma Limited for the development and commercialization of NTC-801, an experimental drug to treat irregular heartbeat, called atrial fibrillation, for an upfront cash payment of $40 million.
Under the collaboration agreement terms, Nissan Chemical and Teijin Pharma will grant exclusive rights for the development and commercialization of NTC-801, and certain backup compounds, worldwide, excluding Japan, to Bristol-Myers Squibb. Nissan Chemical has previously granted Teijin Pharma a unit of Teijin Ltd (TINLY.PK, TINLF.PK) exclusive rights to NTC-801 in Japan.
In January, the company had reported a profit for its fourth quarter, reversing a year-ago loss, helped mainly by the sale of its stake in ImClone Systems and steady growth of its key drugs. Bristol-Myers, which was outbid by Eli Lilly & Co. (LLY) in the takeover battle for Imclone, said that its net earnings for the quarter was $1.24 billion or $0.63 per share, compared to a net loss of $89 million or $0.05 per share in the year-ago period. Net sales for the quarter rose 4% to $5.25 billion from $5.06 billion in the year-ago quarter.
BMY closed Friday's regular trading on NYSE at $20.17, down $1.16, on a volume of 21.72 million shares.
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