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Bristol-Myers looks beyond Revlimid's 75% revenue boost for next big thing

A blockbuster acquisition brought Bristol-Myers Squibb Co. its new best-selling drug in Revlimid and with it the need to build out a pipeline full of drug candidates that can make up for a future loss of sales.

Sales of Revlimid, which was inherited through the 2019 acquisition of Celgene, surpassed $3 billion in the third quarter of 2020, up 10% from the previous quarter. The blockbuster drug faces incoming competition from generics in the coming years as time runs out on its patents.

Executives on Bristol-Myers' Nov. 5 third-quarter earnings call downplayed the immediate effect competition will have on sales of Revlimid, which boosted total third-quarter revenue 75% from the year before to $10.5 billion.

Chief Financial Officer David Elkins said the erosion of Revlimid sales would be characterized "more as a slope, not as a cliff" as generics begin to enter the market in 2022, with full entry starting in 2026. The company settled with Dr. Reddy's Laboratories Ltd. in September to block one of the planned generics until that time.

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"At the time we did the acquisition, all I'd say is that we took a more conservative view on Revlimid than the sell-side equity analysts did," Elkins said. "So with that said, we still believe Revlimid will add potential significant cash flow for the business over that period from 2022 to 2026."

Still, Bristol-Myers' pipeline will play an important role as Revlimid's revenue falls away, Chief Medical Officer Samit Hirawat said.

"The strength of our business beyond Revlimid has continued to be really, really good," Hirawat said. "The progress we've made with the pipeline has given us real confidence in our ability as a company to continue to renew the portfolio."

Bristol-Myers raised its guidance for 2020 to a range of $41.5 billion to $42 billion, taking into account the effect of competition on established brands, Elkins said.

Pipeline necessities

Late-stage trial results issued Nov. 3 found that Bristol-Myers' psoriasis therapy deucravatinib, a tyrosine kinase 2, or TYK2, inhibitor, cleared patients' skin better than Amgen Inc.'s Otezla, a treatment once owned by Celgene that was divested to enable the acquisition. Chief Commercial Officer Christophe Boerner said the TYK2 inhibitor could become the preferred brand of oral psoriasis drugs based on the study.

Bristol-Myers also expanded its footprint in cancer immuno-oncology with the combination of Opdivo and Yervoy, earning approval as a first treatment for lung cancer during the third quarter.

Revenue from Opdivo fell 2% in the quarter year to year, although sales grew 6% over the second quarter. Elkins said Opdivo is poised for growth due to underlying demand. The drop was partially due to a decline in immuno-oncology eligibility, meaning not all patients respond to the drugs due to tumor mutations, according to Boerner.

"We expect the impact to the buying patterns to reverse in the fourth quarter but sequential demand growth to continue, supporting our return to annual year-over-year growth for Opdivo in 2021," Elkins said.

Plans for Opdivo and Yervoy include potential indications in esophageal and bladder cancer. Opdivo also has a pending priority review with the U.S. Food and Drug Administration in renal cell carcinoma, which Elkins said is expected to contribute to growth in 2021.

SNL Image

Bristol-Myers Squibb CEO Giovanni Caforio

Source: Bristol-Myers

The COVID-19 pandemic has stalled the approval of liso-cel, a lymphoma cell therapy slated for a decision from the FDA by Nov. 16. The agency is unable to conduct manufacturing plant inspections that are required before approval at this time. One inspection of a manufacturing facility in Washington state has been completed, but the agency has not yet scheduled a second at another plant in Texas, Hirawat said.

The company is "generally very happy with the dialogue that has been happening" with the agency, according to Hirawat.

New cardio approach

Bristol-Myers' $13.1 billion acquisition of MyoKardia Inc. in October is a way to bank on the success seen with Eliquis, a drug developed through a partnership with Pfizer Inc. Eliquis brought in almost $2.1 billion in the third quarter.

"When you look at MyoKardia, it's much more of a precision approach to cardiovascular, which fits really nicely with our R&D strategy," Bristol-Myers CEO Giovanni Caforio said. "And actually, it's very consistent with the early pipeline we have so far in cardiovascular, so I don't think it's necessarily one approach versus the other."

Caforio added that the cardiovascular market is growing and demonstrates an unmet medical need with "strategic importance" to Bristol-Myers.