BMS Ponies Up for Elotuzumab

This post was commissioned on August 20, 2008, and it was categorized as License/Partnership.

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Bristol-Myers Squibb and PDL BioPharma announced an agreement for the global development and commercialization of PDL BioPharma’s anti-CS1 antibody, elotuzumab (HuLuc63), currently in Phase I development for multiple myeloma.

Does someone have some cash burning a hole in their knickers? BMS has been on fire in the last six months divesting non-core assests, buying small innovative oncology companies (Kosan), bidding for larger partners (ImClone) and now licensing promising mAb’s. The terms here are pretty rich:

Terms:
—————–
$30MM upfront
80/20 development cost sharing
$480MM in development milestones
$200MM in sales milestones (in MM and other indications)
50/50 profit split in US with WW royalty

BMS also has an option to add another CS1 compound (PDL241) to the mix upon inspecting preclinical results. That option would drop another $15MM upfront into PDL’s pocket and another $230MM in milestones with the same profit sharing as above).

PDL brought in some hefty upfront and potential cash in the deal but I think they key here, and what makes it such a great deal for PDL, is the risk aversion. PDL only contributes 20% of development costs while raking in 50% of the US profits. Again, pretty sweet deal for PDL.

Want to out-license an oncology product? Call BMS.

Theoretically Related Posts

October 3, 2008 -- Swami Predicts ImClone’s Future (1)
September 10, 2008 -- ImClone Throws Down and Announces Additional Suitor (0)
August 4, 2008 -- Icahn Responds to BMS Offer for ImClone (0)
July 31, 2008 -- BMS Offers to Buy The Rest of ImClone (0)
November 24, 2008 -- Exelixis and Bristol-Myers Squibb to Co-Develop a Selective Cdc7 Inhibitor (2)
September 29, 2008 -- ImClone To Reveal Mystery Suitor? (0)
January 13, 2009 -- Bristol-Myers Squibb Enters Hep C Race With Help From ZymoGenetics (0)
December 12, 2008 -- BMS Drops 240M For Codevelopment of 2 Exelixis Cancer Drugs (1)
October 6, 2008 -- The Swami Was Right: Lilly Buys ImClone (0)
May 29, 2008 -- BMS Acquires Kosan Biosciences for 233% Premium (7)

This post was constructed by

Eben Tessari

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Eben is a highly caffeinated business development associate at a small, cash sensitive pharmaceutical company somewhere in Massachusetts. He enjoys cliche-less banter, compartmentalization, non-equilibrium thermodynamics and NPV analysis. Agree or disagree with what he's posted? He encourages comments.

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