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The Pulse of the Pharmaceutical Industry

Changing Gears 2013

Written by: | | Dated: Tuesday, October 1st, 2013

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Although the company’s long-time best seller Plavix fell off patent in 2012, a number of Bristol-Myers Squibb’s newer compounds – both already on the market and in the pipeline – are showing signs of future potential.

For Bristol-Myers Squibb, 2012 was a year of strategic transition. The mid-year loss of exclusivity of the cardiovascular drug Plavix – which represented a third of the company’s revenue in 2011 – was a major trauma, even if long expected. But in the shadow of Plavix, company executives have been placing their faith in a number of newer products, several of which showed strong signs of fulfilling those expectations in 2012 and early 2013. With two new blockbuster brands in 2012, another two brands that should cross the annual billion-dollar barrier soon, and more high-potential compounds just being approved or at the top of the pipeline, the “BioPharma Transformation” that Bristol-Myers Squibb began under previous CEO James Cornelius and has continued under current incumbent LambertoAndreotti appears to be working so far, even if the company’s top-line revenue is suffering in the short term.

“Clearly, we are in a strong position,” Andreotti says. “Our BioPharma Transformation has been a journey during which we have worked through many challenges and seized many opportunities. We have been finding our way through the losses of exclusivity. We have been adapting to the ‘new normal’ of global economic uncertainty. And we have just completed an important year of transition – one that underscored the potential of our increasingly diversified portfolio and pipeline of innovative medicines.”

With the loss of patent protection for Plavix, Bristol-Myers Squibb’s top line fell by 17.1 percent in 2012 to $17.62 billion. GAAP net earnings attributable to BMS decreased 47.2 percent to $1.96 billion and EPS dropped by a dollar to $1.16 compared to 2011. The descent continued in the first six months of 2013, with revenue falling 18.7 percent to $7.88 billion, income about halving to $1.15 billion, and EPS down 33 cents to $0.69 compared to first-half 2012. Company leaders are projecting full-year 2013 EPS at between $1.41 and $1.49.

Product Performance

The schizophrenia drug Abilify took over as the top performer in Bristol-Myers Squibb’s portfolio in 2012, growing sales by 2.5 percent to $2.83 billion. U.S. net sales of Abilify increased in 2012 due to higher average net selling prices and a $62 million reduction in BMS’s share in the estimated amount of customer rebates and discounts attributable to 2011 based on actual invoices received that were partially offset by fluctuations in retail buying patterns. This was partially offset by the reduction in BMS’s contractual share of net sales with partner marketer Otsuka from 53.5 percent in 2011 to 51.5 percent in 2012. This percentage will continue to drop until Abilify loses exclusivity in April 2015. In the first half of 2013, Abilify generated $1.09 billion in sales, an 18.5 percent drop compared with the first half of 2012.

Abilify’s ascent came mostly due to the corresponding descent of the blood thinner Plavix, which lost its exclusivity in mid-2012. A year after passing $7 billion in annual sales for BMS for the first time, Plavix sales fell to $2.55 billion in 2012 and to just $135 million in the first half of 2013.

The HIV brand Sustiva has generated modest sales gains of late; the product produced $1.53 billion in 2012, 2.8 percent better than in 2011, and $798 million in first-half 2013, a 3.1 percent improvement over same-time 2012. In May 2013, FDA approved a supplemental new drug application for Sustiva including dosing recommendations for HIV-1 infected pediatric patients 3 months to 3 years old and weighing at least 3.5 kilograms. This approval offers a once-daily option as part of a regimen for this population and includes a “capsule sprinkle” administration method for patients who cannot swallow capsules or tablets.

“Bristol-Myers Squibb recognizes the importance of offering alternative methods of administration of HIV medicines, including for pediatric patients who cannot swallow tablets or capsules, and their caregivers who help manage their treatment,” says Brian Daniels, M.D., senior VP, Global Development and Medical Affairs. “This approval is one example of our enduring commitment to the HIV patient community.”

Reyataz, Bristol-Myers Squibb’s other HIV brand, has produced an up-and-down sales performance recently. The drug’s sales dropped 3.1 percent in 2012 to $1.52 billion, though sales were up 3.7 percent in first-half 2013 to $792 million.

Sales of the hepatitis B medicine Baraclude grew impressively in 2012, rising 16.1 percent to $1.39 billion. In October 2012, FDA approved an update to the labeling for Baraclude to include data on African Americans and liver transplant recipients with chronic hepatitis B infection. In February 2013, though, the U.S. District Court for the District of Delaware invalidated the composition of matter patent covering Baraclude, which was scheduled to expire in 2015. Bristol-Myers Squibb is appealing this decision. The risk it represents is limited, though; more than 80 percent of Baraclude sales in 2012 came from outside the United States, including 35 percent growth in China, the drug’s largest market. In first-half 2013, Baraclude global sales were up 8.1 percent to $737 million.

The rheumatoid arthritis drug Orencia crossed the $1 billion mark for the first time in 2012, generating $1.18 billion in sales, an impressive improvement of 28.2 percent. In October 2012, the European Commission granted marketing authorization for a subcutaneous formulation of Orencia in combination with methotrexate for the treatment of moderate-to-severe active RA in adults. The following month, clinical trial results showed that the subcutaneous formulation of Orencia on a background of methotrexate was similar to Humira plus methotrexate in demonstrating clinical improvements in patient reported outcomes in adults with moderate-to-severe rheumatoid arthritis, including patient pain, patient global assessment, fatigue, physical function, and health related quality of life that were sustained for one year. Further exploring additional uses, Phase III trials for Orencia are beginning in lupus nephritis, a complex disease with a high unmet need, and in psoriatic arthritis. In the first half of 2013, Orencia sales were up 23.5 percent to $672 million.

Sprycel, for chronic myeloid leukemia, also hit the blockbuster mark for the first time in 2012, with sales advancing 26.9 percent to $1.02 billion. Sprycel was launched in China in mid-2012 for second-line CML treatment, becoming BMS’s first oncology therapy launched in China in 17 years. To further address areas of unmet medical need, ongoing studies are examining whether CML patients who have significant responses to Sprycel can eventually come off therapy and maintain their responses. Early studies also are assessing Sprycel in mutation-defined lung cancer and in pancreatic cancer. In June, FDA approved an update to the Sprycel product labeling; the new labeling now includes three-year efficacy and safety data in patients with newly diagnosed Philadelphia chromosome-positive (Ph+) chronic myeloid leukemia in chronic phase and five-year data in CP Ph+ CML patients who are resistant or intolerant to Gleevec. In the first half of 2013, Sprycel sales rose 26.1 percent year-over-year to $599 million.

The diabetes drug Onglyza could join BMS’s list of blockbuster drugs this year, its fourth full year on the market. Onglyza generated $709 million in sales in 2012, a jump of 49.9 percent; first-half 2013 sales were up 32.7 percent to $442 million. In July 2012, the results of a pooled post-hoc assessment of five 24-week Phase III studies showed that Onglyza 5 milligrams demonstrated improvements across key measures of blood sugar control (glycosylated hemoglobin levels, or HbA1c; fasting plasma glucose, or FPG and post-prandial glucose, or PPG) compared to placebo in adult patients with type 2 diabetes at high risk for cardiovascular disease. The results of the Phase IV SAVOR-TIMI-53 trial, released in June, were not as favorable. In that study of adult patients with type 2 diabetes with either a history of established cardiovascular disease or multiple risk factors, Onglyza met the primary safety objective of non-inferiority, but did not meet the primary efficacy objective of superiority, for a composite endpoint of cardiovascular death, non-fatal myocardial infarction or non-fatal ischemic stroke, when added to a patient’s current standard of care (with or without other anti-diabetic therapies), as compared to placebo.

The largest percentage jump among BMS products in 2012 came from the metastatic melanoma drug Yervoy, whose sales nearly doubled from $360 million to $706 million in 2012, its first full year on the market. The tail end of the year brought several rounds of good news for the drug. In September 2012 Bristol-Myers Squibb announced four-year and five-year survival rates based on long-term follow up from Phase III and Phase II clinical trials in patients with treatment-naïve and previously-treated metastatic melanoma. Long-term follow-up from the Phase III study demonstrated that treatment with Yervoy plus dacarbazine resulted in a four-year survival rate of 19 percent compared to 9.6 percent for dacarbazine alone. Then, in October the compound received the Prix Galien USA 2012 Award for Best Biotechnology Product. The following month, the National Institute of Health and Clinical Excellence in the UK recommended Yervoy, which is approved in the European Union for the treatment of previously-treated metastatic (advanced) melanoma, within the Final Appraisal Determination. This decision enables eligible patients in England and Wales to routinely access treatment with Yervoy through the National Health Services. Yervoy has a chance to attain blockbuster status in 2013, with first-half sales up 46.2 percent to $462 million.

Hopes to expand Yervoy into another indication took a hit in September 2013 though, with the release of data from a Phase III study comparing Yervoy to placebo following radiation in patients with advanced metastatic castration-resistant prostate cancer who have received prior treatment with docetaxel. The study’s primary endpoint of overall survival did not reach statistical significance. However, anti-tumor activity was observed across some efficacy endpoints, including progression free-survival. Yervoy is also being studied in squamous non-small cell and small cell lung cancer, gastric cancer, and ovarian cancer, as well as first line metastatic melanoma and adjuvant melanoma.

Erbitux, for colorectal cancer and squamous cell carcinoma of the head and neck, earned $702 million in sales for Bristol-Myers Squibb in 2012, an improvement of 1.6 percent. In July 2012, FDA approved Erbitux in combination with the chemotherapy regimen Folfiri (irinotecan, 5-fluorouracil, leucovorin) for the first-line treatment of patients with KRAS mutation negative (commonly known as KRAS wild-type), epidermal growth factor receptor (EGFR)-expressing metastatic colorectal cancer as determined by FDA-approved tests for this use. Concurrently, FDA also approved the first KRAS companion diagnostic test, the Therascreen KRAS diagnostic kit developed by Qiagen. In the first half of 2013, Erbitux sales were down 7 percent to $333 million.

Acquisitions And Partnerships

In September 2012, Vanderbilt University and Bristol-Myers Squibb signed a collaboration agreement for the discovery, development, and commercialization of novel therapies acting on the mGluR4 glutamate receptor, known as positive allosteric modulators or PAMs, for the treatment of Parkinson’s disease. Under the collaboration, the Vanderbilt Center for Neuroscience Drug Discovery will identify drug candidates from its existing program, which obtained major support from The Michael J. Fox Foundation for Parkinson’s Research. Bristol-Myers Squibb will have the right to develop and commercialize products resulting from the collaborative research program. Vanderbilt University will receive an upfront payment and multi-year research funding to continue to discover additional compounds. Vanderbilt is eligible to receive milestones and royalties based on developmental success and worldwide sales of the drugs emerging from the collaboration.

“At Bristol-Myers Squibb we are dedicated to discovering and developing medicines that address serious unmet need,” says Francis Cuss, senior VP for Research at BMS. “As part of our strategy, we continually seek to build relationships with organizations that have innovative programs and capabilities that complement our own internal efforts. We are thrilled to have the opportunity to work with the Vanderbilt Center for Neuroscience Drug Discovery’s highly regarded scientists and laboratories to potentially find a way to help patients with Parkinson’s disease.”

In October 2012, Bristol-Myers Squibb and Sanofi announced the restructuring of their long-term alliance following the loss of exclusivity of Plavix and Avapro/Avalide in many major markets. Under the terms of the revised agreement, which went into effect Jan. 1, 2013, Bristol-Myers Squibb returned to Sanofi its rights to Plavix and Avapro/Avalide in all markets worldwide with the exception of Plavix in the United States and Puerto Rico, giving Sanofi sole control and freedom to operate commercially. In exchange, Bristol-Myers Squibb will receive royalty payments on Sanofi’s sales of branded and unbranded Plavix worldwide, excluding the United States and Puerto Rico, and on sales of branded and unbranded Avapro/Avalide worldwide, in each case through 2018, and will receive a terminal payment of $200 million from Sanofi in December 2018. Plavix rights in the United States and Puerto Rico will continue unchanged under the terms of the existing agreement through December 2019.

BMS, Pfizer, and Portola Pharmaceuticals announced in November 2012 a clinical collaboration agreement to conduct a proof-of-concept study of PRT4445 and Eliquis. PRT4445 is a universal Factor Xa inhibitor antidote in clinical development designed to reverse the anticoagulant activity of any Factor Xa inhibitor. No agents are approved to reverse the activity of Factor Xa inhibitors. The collaboration will be in effect during the clinical proof-of-concept study, which was anticipated to start by the end of 2012. The study is designed to demonstrate the safety of PRT4445 and its ability to reverse the anticoagulation activity of Eliquis and other Factor Xa inhibitors, including betrixaban, Portola’s Phase III oral Factor Xa inhibitor. Bristol-Myers Squibb and Pfizer will make an undisclosed cash payment to Portola upon initiation of the proof-of-concept study with Eliquis and will provide development and regulatory guidance for the study. Portola retains 100 percent global development and commercialization rights for PRT4445.

“Patient safety and improved patient outcomes have guided our clinical development program for Eliquis, including our efforts to identify a reversal agent for urgent clinical situations,” says Brian Daniels, senior VP, Global Development and Medical Affairs, Bristol-Myers Squibb. “With our partner Pfizer, we look forward to working with Portola to advance the scientific understanding of the role of PRT4445 as a potential antidote for Eliquis.”

In December, Bristol-Myers Squibb and The Medicines Company signed a global license and two year collaboration for Recothrom, a recombinant thrombin approved by FDA for use as a topical hemostat to control non-arterial bleeding during surgical procedures. Under terms of the agreement, The Medicines Company was responsible for an upfront collaboration payment of $105 million and an upfront option fee of $10 million to BMS. The Medicines Company has also agreed to pay Bristol-Myers Squibb a tiered royalty on annual net revenues of Recothrom during the two-year collaboration term. Bristol-Myers Squibb will retain responsibility for the manufacturing of Recothrom and will be The Medicine Company’s exclusive supplier of Recothrom during the term of the agreement. The option enables The Medicines Company to acquire the Recothrom assets for a purchase price based on average net sales during the two-year collaboration term.

In February 2013, BMS entered into a three-year collaboration deal with Reckitt Benckiser Group plc for several of its over-the-counter medicines currently sold across Latin America, primarily in Mexico and Brazil. Under the terms of the collaboration pact, Reckitt Benckiser will pay BMS an upfront payment of $438 million for the exclusive rights to sell, distribute, and market several medicines for a three-year period, including Picot, an antacid; Tempra, a pain reliever and fever reducer; Micostatin, an antifungal; and Graneodin, a cough and cold medicine sold primarily in Mexico; Dermodex, an anti-rash cream; Luftal, an anti-gas medicine; and Naldecon, a cold and flu symptoms treatment sold primarily in Brazil.

“As part of our BioPharma strategy, Bristol-Myers Squibb has worked to focus its businesses around the world on innovative medicines in areas of high unmet medical need,” says Charles Bancroft, executive VP, Intercontinental Region and Japan, and chief financial officer. “This agreement allows us to increase our focus on the launch and commercialization of our innovative portfolio in these important markets in Latin America.”

In June 2013, Bristol-Myers Squibb and Simcere Pharmaceutical Group, a pharmaceutical company in China, announced the expansion of their strategic relationship formed in 2010. The companies agreed to collaborate in China on the development and commercialization of the subcutaneous formulation of Orencia for the treatment of rheumatoid arthritis. Orencia is already on the market for the treatment of rheumatoid arthritis in the United States, Europe, and Japan. Under the terms of the agreement, Simcere will perform and fund all development and regulatory activities required to obtain market approval for Orencia SC in China, based on a pre-agreed development plan. The companies will share responsibility for commercializing Orencia, and will share profits and losses related to Orencia SC in China.

“We are pleased to partner with Simcere on Orencia SC, moving beyond our companies’ original focus on early development activities to a partnership focused on the clinical development and commercialization of one of our currently marketed products,” says Beatrice Cazala, executive VP, Commercial Operations. “If successful, not only could Orencia SC bring a new option to Chinese patients suffering from rheumatoid arthritis, but also it could become Bristol-Myers Squibb’s first biologic medicine for the Chinese market.”

In July, Bristol-Myers Squibb and Samsung BioLogics entered into a 10-year agreement under which Samsung will manufacture a commercial antibody cancer drug for Bristol-Myers Squibb at its recently completed plant in Songdo Incheon, South Korea. Technology transfer and trial production were scheduled to begin in July 2013 and commercial production will immediately begin following regulatory approvals.

Samsung BioLogics is a full-service provider of contract process development and cGMP manufacturing to the global biopharmaceutical industry. The company’s facilities are custom designed for monoclonal & recombinant production with maximum flexibility. Services include cell line generation, process and analytical method development, analytical services, clinical and commercial bulk cGMP manufacturing of drug substance and drug product such as quality assurance, quality control, and regulatory compliance standards and support for customers.

Research And Development

Eliquis, the cardiovascular drug at the top of Bristol-Myers Squibb’s pipeline, went on a tear of major-market approvals towards the end of 2012. In November, the compound earned approval in Europe for prevention of stroke and systemic embolism in adult patients with nonvalvular atrial fibrillation with one or more risk factors. The next month, Eliquis was approved by Japanese regulators for the prevention of ischemic stroke and systemic embolism in patients with nonvalvular atrial fibrillation. Then in January 2013, the drug was approved by FDA to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation. The oral Factor Xa inhibitor anticoagulant Eliquis is being developed jointly by Bristol-Myers Squibb and Pfizer. In July 2013 the two companies announced that FDA had accepted for review ansNDA for Eliquis for the prophylaxis of deep vein thrombosis which may lead to pulmonary embolism in adult patients who have undergone hip or knee replacement surgery.

In November, Bristol-Myers Squibb announced Phase II data demonstrating that the 12-week Triple DAA treatment regimen of daclatasvir, asunaprevir, and BMS-791325 achieved sustained virologic response 12 weeks post-treatment in 94 percent (15/16) of treatment-naïve, genotype 1 chronic hepatitis C patients. Phase II studies of this investigational Triple DAA regimen are continuing; Phase III development is anticipated to begin in 2014.

Also in November, Phase IIb study results showed that a 24-week regimen combining the investigational compound Peginterferon lambda-1a with the investigational direct-acting antiviral DAA daclatasvir and ribavirin, achieved sustained virologic response 12 weeks post-treatment in 93 percent (13/14) of treatment-naïve, genotype 1b chronic hepatitis C patients who achieved a protocol-defined response. PEGinterferon lambda-1a is the first investigational type III interferon in Phase III development for the treatment of hepatitis C. Daclatasvir is the first NS5A replication complex inhibitor to be investigated in HCV clinical trials and is in Phase III development.

In December, Bristol-Myers Squibb and codeveloperAbbVie announced results from a small, randomized Phase II open-label study in patients with previously-treated multiple myeloma that evaluated two doses of elotuzumab (10 mg/kg and 20 mg/kg) in combination with lenalidomide and low-dose dexamethasone. In the 10 mg/kg arm, median progression-free survival, or the time without disease progression or death, was not reached after 20.8 months of follow up and the objective response rate was 92 percent. Of patients who received elotuzumab at a dose of 20 mg/kg, median progression-free survival was 18.6 months (N=37) and objective response was 76 percent. Elotuzumab is a humanized monoclonal antibody that enhances immune cell mediated killing of multiple myeloma cells that have a surface protein called CS1. CS1 is a cell-surface glycoprotein that is highly expressed on myeloma cells. Two Phase III studies of elotuzumab in combination with lenalidomide and low-dose dexamethasone at a dose of 10 mg/kg are under way.

In June 2013, Bristol-Myers Squibb and partner developer AstraZeneca announced results from a two-week Phase IIa pilot study evaluating dapagliflozin added to insulin in 70 adult patients with sub-optimally controlled type 1 diabetes. Results from this study showed that in patients treated with dapagliflozin, no subjects discontinued due to lack of glycemic control, few genital and urinary tract infections were reported, and hypoglycemia was observed in all treatment groups. In addition, mean daily blood glucose derived from 7-point glucose measurements trended downward in all treatment groups through day seven and reductions in total daily insulin dosing at day seven were observed with dapagliflozin.

Dapagliflozin is a selective and reversible inhibitor of sodium-glucose cotransporter 2 (SGLT2), which works independently of insulin. The compound is already approved for the treatment of type 2 diabetes in the European Union, Australia, New Zealand, and Mexico under the trade name Forxiga; its European approval was granted in November 2012. In January 2012, FDA issued a complete response letter regarding the NDA for dapagliflozin for the treatment of adults with type 2 diabetes, requesting additional clinical data to allow a better assessment of the benefit-risk profile.

Also in June, FDA granted a priority review designation for the BLA for metreleptin, an investigational agent for the treatment of metabolic disorders associated with inherited or acquired lipodystrophy, a rare disease estimated to affect a few thousand people around the world, often with an early age of onset. Metreleptin, a recombinant analog of the human hormone leptin, is being developed jointly by Bristol-Myers Squibb and AstraZeneca.

Product Sales And Financial Performance

Abilify $2,827 $2,758
Plavix $2,547 $7,087
Franchise $1,527 $1,485
Reyataz  $1,521 $1,569
Baraclude $1,388 $1,196
Orencia $1,176 $917
Sprycel $1,019 $803
Kombiglyze $709 $473
Yervoy $706 $360
Erbitux  $702 $691

All sales are in millions of dollars.

  2012 2011
Revenue $17,621 $21,244
Net income $1,960 $3,709
Diluted EPS $1.16 $2.16
R&D $3,904 $3,839
  1H13 1H12
Revenue $7,879 $9,694
Net income $1,153 $2,290
Diluted EPS $0.69 $1.02
R&D $1,881 $1,871

All figures are in millions of dollars except EPS.

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