How has it been with the US$74 billion acquisition of Xinji to return to the world's TOP10 BMS?

Set a record for the largest M&A transaction in the pharmaceutical field and the scale of preclinical drug acquisitions.
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In recent years, BMS has continued to move
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Since the launch of the "Pearl Chain Project" in 2009 to deal with the decline in performance brought about by the patent cliff, in the following ten years, through continuous acquisition and joint development, dozens of products under research have been obtained and become blockbuster products.
The expansion of BMS has been vigorous
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Whether it is Opdivo or Revlimid, BMS's core products have a huge connection with the company's mergers and acquisitions
.

At that time, Medarex, an antibody drug manufacturer bought by BMS, acquired two product lines, Yervoy and Opdivo.
These two drugs have brought substantial profits to BMS in the follow-up and created BMS's first-mover advantage in the field of tumor immunity.

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Today, Revlimid 2020, which was acquired by Xinji, has annual sales of 12.
106 billion U.
S.
dollars, and it has rapidly grown into the new performance pillar of BMS
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Judging from the current business distribution of BMS, it is mainly concentrated in the three major areas of oncology, hematology and immunology
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From the perspective of product performance, Revlimid (lenalidomide), Eliquis (apixaban), Opdivo (nivolumab), Orencia (abatacept), Pomalyst/Imnovid (pomalidomide), Sprycel ( The seven products of Dasatinib and Yervoy (Ipilimumab) had a combined revenue of more than US$20 billion in the first half of 2021, accounting for more than 90% of BMS's total revenue in the first half of this year

(Image source: BMS 2021H1 financial report)

How will BMS, which has acquired Xinji and returned to the global pharmaceutical TOP10 club, stabilizes this position? Is there any chance of a comeback for O medicine, which is gradually widened by K medicine? Where is the new growth point of BMS performance in the future?

01 The two giants hold together for warmth

01 The two giants hold together for warmth

Before BMS acquired Xinji, both companies were facing tremendous operating pressure
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In 2018, BMS's stock price fell by 15.

In addition to wanting to gain business scale advantage through a huge volume, BMS also wants to use Xinji's R&D pipeline to gain new momentum for performance growth to solve the problem of its own shortage of drugs
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Before the acquisition, Eliquis and Opdivo accounted for about 60% of the total sales of BMS.

With the completion of the acquisition of Xinji by BMS in 2019, the merger of the world's two largest cancer drug companies has given BMS a more significant advantage in the field of tumor immunity
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And it became the largest M&A transaction in the pharmaceutical field in history

What does the acquisition of Sunbase bring to BMS? One or two can be seen from the performance of the 2020 financial report after the consolidation
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Before the completion of the acquisition, BMS and Xinji ranked 11th and 17th respectively in the top 20 global pharmaceutical companies in terms of drug sales in 2018
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After BMS acquired Xinji, BMS has jumped to No.

In 2020, the total annual revenue of BMS will reach US$42.
518 billion, a 63% increase from the US$26.
145 billion in 2019
.

Among the eight drugs with sales revenue of over US$1 billion by BMS in 2020, three drugs were acquired from the new product pipeline, including Revlimid (lenalidomide), Pomalyst (pomalidomide) and Abraxane (albumin).
Paclitaxel), the sales accounted for 41.
5%, which shows that the acquisition of Xinji greatly complements the product layout of BMS
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Revlimid is Shinji's star product, with anti-angiogenesis and anti-tumor properties.
In 2018, it had sales of 9.
685 billion U.
S.
dollars, accounting for 63.
4% of Shinji's annual revenue
.

Given that some of Revlimid's patents will not expire until 2027, analysis predicts that the drug's market share will not be shaken by 2022

The acquisition of other drugs from Xinji also boosted the overall revenue of BMS
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Multiple myeloma drug Pomalyst has revenue of US$1.

It is worth noting that Reblozyl was approved by the FDA in 2019.
It is the first drug approved by the FDA to treat β-thalassemia-related anemia, and it is also the first and only red blood cell maturation agent approved by the FDA
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Earlier, analysts at Wall Street investment bank Jefferies had predicted that Reblozyl's peak annual sales would reach $2 billion

02 Is there still a chance for O medicine?

02 Is there still a chance for O medicine?

Once the absolute king of BMS sales performance, Opdivo (O drug, nivolumab) has now been replaced by Revlimid and Eliquis, and its performance has reached the third place
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As the number one player of BMS in the field of immunotherapy, O medicine has not performed satisfactorily in the past two years.
Not only has it been far behind by its competitor K medicine, it has even experienced a decline in performance in 2020
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We can't help asking, has the OK battle on the PD-1 battlefield come to an end?

As the world's two leading immunotherapy drugs, the competition between Merck's K drug and BMS' O drug has always been a highlight
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The peak duel between the two began when they went public
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On September 3, 2014, Drug O was launched in Japan, becoming the world's first PD-1 to be marketed for the treatment of advanced malignant melanoma
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Only one day after drug O was launched, drug K was launched in the United States, becoming the first PD-1 to be marketed in the United States.
It is also used for the treatment of advanced malignant melanoma
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Since then, the competition between O drugs and K drugs in the marketed countries and approved indications has shown a trend of catching up
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Obviously, the approval of the indication is the core driving force for the expansion of the PD-1 market, and it is also directly reflected in the drug sales data
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Looking back at the "entanglement" of K drugs and O drugs in the expansion of indications, the previous battle for the first-line treatment of non-small cell lung cancer was a battle of Tianwangshan
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Lung cancer is the world's largest type of cancer, and approximately 1.
5 million people die from lung cancer each year
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Non-small cell lung cancer is the most common type of lung cancer, accounting for 85% of all lung cancers
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As early as 2016, both K and O drugs have been approved for the treatment of second-line non-small cell lung cancer.
Whoever can be the first to be approved for the first-line therapy in this field will inevitably have an absolute advantage in the competition
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In January 2014, BMS started the Phase III study of Drug O for the first-line treatment of non-small cell lung cancer-CheckMate 026.
It was only 4 months later that Merck started the Phase III study of Drug K for the first-line treatment of non-small cell lung cancer— —KEYNOTE-024
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In terms of time, O drug seems to have taken the lead, but in June 2016, Merck was the first to announce that KEYNOTE-024 reached the clinical end point; and 4 months later, BMS unexpectedly announced that the Phase III study of CheckMate026 had not reached the clinical end point
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Drug O encountered Waterloo in the first-line treatment of lung cancer, Drug K opened the Jedi counterattack
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In the first few years of PD-1's launch, O drug suppressed K drug in terms of sales for three consecutive years
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By 2017, K drug sales reached 3.
809 billion U.
S.
dollars, an increase of 2.
4 billion U.
S.
dollars, while O drug only increased by 1.
2 billion U.
S.
dollars, with sales of 4.
948 billion U.
S.
dollars, and the leading advantage was gradually shrinking
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The failure in the field of lung cancer has also directly led to changes in the global market sales pattern of PD-1
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In 2018, K drug sales officially surpassed O drug
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That year, K drug sales were 7.
171 billion U.
S.
dollars, while O drug was only 6.
735 billion U.
S.
dollars
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According to previous reports from Merck, the strong growth of K drug is contributed by the lung cancer field
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In 2017, 55% of K drug revenue in the United States came from the lung cancer field, and in 2018 this proportion reached about 70%
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With the first-line treatment of lung cancer, K drug successfully counterattacked
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In 2020, when O drug is blocked due to the impact of the epidemic, K drug is still in the "siege"
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The gap between the two will be gradually widened in 2020
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Looking back at the past, in 2016, the sales of O drugs were almost three times that of K drugs; by 2020, the sales of K drugs were close to 15 billion U.
S.
dollars, nearly twice that of O drugs
.
However, the leading advantage of K medicine is far greater than that of O medicine
.

Although "O medicine" has survived the decline in performance due to the epidemic in 2020, and has gradually recovered after entering 2021, with revenue of more than 3.
6 billion U.
S.
dollars in the first half of the year, competitors will not stop
.
K drug revenue in the first half of 2021 reached 8.
078 billion U.
S.
dollars, an increase of 23% over the same period last year; while O drug's 3.
63 billion U.
S.
dollars, again less than half of K drugs
.
According to Evaluate Pharma's prediction, in the next 6 years, K medicine will continue to lead the PD-1 track
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At the same time, O medicine will expire in 2028.
As of now, its biosimilar manufacturers include Sydney NeuClone Pharmaceuticals, Sweden Xbrane Biopharmaceuticals, and China's Luye Pharmaceuticals
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(Data source: Merck and BMS financial reports over the years)

Of course, as a strong player in the field of immuno-oncology, BMS is also exploring the combination of O drugs
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The combination of Drug O and Yervoy, another immune checkpoint inhibitor of BMS, is widely optimistic
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Yervoy (Ipilimumab) has continued to exert strength in recent years, with revenue approaching US$1 billion in the first half of 2021, a year-on-year increase of 26%
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In June of this year, the European Commission (EC) approved Opdivo plus Yervoy for the treatment of mismatch repair defects or high microsatellite instability (dMMR/MSI-H) metastatic colorectal cancer after previous fluoropyrimidine-based combination chemotherapy ( mCRC) in adult patients
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Long before Drug O, in April 2011, BMS launched the world's first immuno-oncology drug Ipilimumab (Yervoy) in the United States
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By 2018, Ipilimumab will be included in the varieties with BMS sales of more than US$1 billion
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Unlike drug O, ipilimumab is a CTLA-4 inhibitor
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Although PD-1 monoclonal antibody and CTLA-4 monoclonal antibody are both immune checkpoint inhibitors, they act on different stages of anti-tumor immunity
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From a theoretical point of view, ipilimumab activates T cells, while drug O uses activated T cells to kill tumors.
The two complement each other through a combination, which can achieve a synergistic effect of "1+1>2" and enhance cancer treatment.
The "lethal power" of cells
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The combination of O drug and ipilimumab is the world's first immunological combination.
It has been achieved in various fields such as melanoma, kidney cancer, and lung cancer.
It has been proven to greatly improve the objective curative effect and improve the quality of life of patients.
Achieve the goal of long-term survival benefits
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03 Buy and sell, keep focusing on the core

03 Buy and sell, keep focusing on the core

In response to the upcoming patent cliff, in 2009, BMS started an M&A road with the "Pearl Chain Project" as its core, with the intention of obtaining valuable biological science and technology through alliances, cooperation, and purchases
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In the following ten years, BMS obtained dozens of products under research through continuous acquisition and joint development, and opened the way to diversification
.

In August 2009, Medarex, an antibody drug manufacturer bought by BMS for US$2.
4 billion, acquired two product lines, Yervoy and Opdivo.
At that time, Yervoy’s clinical trials for melanoma were in phase III, and these two drugs will be subsequently obtained by BMS.
Benefits are abundant, creating the first-mover advantage of BMS in the field of tumor immunity
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According to incomplete statistics, before BMS acquired Xinji at a sky-high price of US$74 billion, BMS had conducted 15 mergers and acquisitions in the past 20 years
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(Picture source: "Success Code of Pharmaceutical Giants" collated)

While expanding, BMS is also continuously divesting non-core businesses
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In 2009, BMS divested the milk powder company Mead Johnson for US$7.
2 billion; in February 2014, BMS divested its diabetes business and transferred all shares of the Global Diabetes Alliance to AstraZeneca; in February 2016, BMS completed its partnership with Merck on diabetes drugs.
Handover of Huazhi; In December 2016, BMS announced the dissolution of the OTC business and its team.
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BMS, which has divested its non-core business and sought transformation, continues to focus on the research of innovative drugs, focusing on the research and development of tumors and immunology , Anti-fibrosis, cardiovascular and other diseases
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After completing the US$74 billion acquisition of Xinji, BMS still has not stopped the acquisition
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And set a record for the scale of preclinical drug acquisition
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BMS acquired MyoKardia, a clinical-stage biopharmaceutical company, at a price of approximately US$13 billion to strengthen its heart disease treatment product portfolio and reduce its dependence on cancer drugs
.
Through this transaction, BMS obtains Mavacamten, an experimental heart disease treatment with "blockbuster" drug potential
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This transaction is also another large-scale acquisition after BMS acquired Xinji for US$74 billion, and set a record for the scale of preclinical drug acquisitions
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According to estimates by Wall Street brokerage Wedbush analyst David Nierengarten, Mavacamten, a drug for the treatment of obstructive hypertrophic cardiomyopathy, will generate at least $2.
6 billion in revenue per year by 2026
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As BMS announces its acquisition of MyoKardia, it will further supplement and expand the product pipeline and layout of BMS's cardiovascular drugs
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In this regard, BMS CEO Giovanni Caforio said that by acquiring Mavacamten, the franchise of BMS cardiovascular drugs will be further strengthened
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Looking at the world, large pharmaceutical companies are focusing on their own R&D by stripping and slimming, while smaller pharmaceutical companies are trying to diversify themselves through mergers and acquisitions
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Undoubtedly, BMS belongs to the latter.
Large-scale acquisitions have caused major changes in BMS's product pipeline and business layout, and also affected the ranking of global pharmaceutical companies
.

Today, BMS's sales have exceeded 40 billion U.
S.
dollars, and it will rank firmly in the global pharmaceutical TOP10 club for some time to come
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