Bristol-Myers Buys Back Medarex Discard

| About: Bristol-Myers Squibb (BMY)

When Bristol-Myers Squibb (NYSE:BMY) pulled off what looks to be the deal of the last decade when it bought Medarex for $2.4bn to access the technology that produced Opdivo and Yervoy, it is interesting that it did not apparently see that another asset, now called HuMAX-IL8, might be worth up to $520m.

Through a series of transactions that antibody ended up with the private Swedish group Cormorant Pharmaceuticals, which fell to Bristol-Myers yesterday for $95m up front. After passing through Genmab’s (GMAXY) hands, the immune-activating agent has been steered away from inflammatory disease and into a solid tumour trial at the US National Cancer Institute (NCI).

Multiple owners

At the time of the Medarex deal, Genmab owned most of the economics of HuMAX-IL8, known then as MDX-018, as part of a 2007 asset exchange in which Genmab gave up multiple oncology programmes and got rights to the interleukin-8 blocking antibody. Genmab, a Medarex spinout, seemed more interested in its promise in psoriasis than in oncology, although at the time work was under way in glioblastoma.

Bristol-Myers business development staff must have reviewed reports from the 2009 Medarex deal before pulling the trigger on Cormorant, perhaps inspired by the NCI trial investigators’ decision to escalate dosing in a phase I trial in solid tumors. Cormorant’s plan had been to advance HuMAX-IL8 into combination trials with PD-1/PD-L1 inhibitors, cancer vaccines or chemotherapy once safety was proven and signs of efficacy emerged.

Presumably, this will also be Bristol-Myers’s plan, since the New York-based company has put Opdivo and Yervoy into dozens of combination trials with immuno-oncology agents, targeted drugs and chemotherapies alike (Merck & Co shows the way in immuno-oncology combinations, November 23, 2015).

IL-8 is a cytokine associated with tumor cell division, growth and proliferation, as well as with the growth of blood vessels feeding cancerous tissues. Thus it makes a logical target for anticancer agents.

Yet EP Vantage’s last examination of the fertile area of immuno-oncology combination trials suggests that Bristol-Myers could have the IL-8 space all to itself.

Open field

This might be because there is virtually no other work with IL-8-targeting agents. A scan of the pipeline in EvaluatePharma shows that only one other is in active oncology research in ProNAI Therapeutics’ (NASDAQ:DNAI) PNT600, and that group is more focused on AS-141, an asset it licensed in May. ProNAI shares declined 4% yesterday.

Abgenix got as far as phase II with an IL-8-blocking antibody in 2002, but scrapped plans to study it in melanoma after disappointing results in psoriasis.

In any case, Bristol-Myers must have liked something it saw in HuMAX-IL8, either from the ongoing NCI trial or by staying in contact with Genmab and then Cormorant after the Medarex transaction.

With an up-front fee of less than two weeks’ worth of Opdivo sales this year, this looks to be a good gamble on an approach Bristol-Myers could own for a while.

Study

Trial ID

COR01CD101

NCT02536469

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