Bristol-Myers Squibb Company
) decision to opt out of the development process of rheumatoid
arthritis (RA) candidate clazakizumab (formerly ALD518) caused the
shares of its erstwhile partner Alder BioPharmaceuticals (
) to plummet by 13.15% to $14.80 on Sep 2, 2014.
Bristol-Myers arrived at the decision to hand back clazakizumab
rights to Alder after a portfolio review. The decision was not
based on any adverse data or technical problems. Alder stated in
its press release that it will be solely responsible for the
development of the candidate going forward.
We remind investors that Bristol-Myers and Alder were
collaborating on clazakizumab since 2009. At the time of inking the
deal, the companies had said that the value of the deal could
exceed $1 billion. Alder had received an upfront payment of $85
million from Bristol-Myers. Moreover, Bristol-Myers made
significant milestone payments to Alder before the deal was
terminated. Consequently, Bristol-Myers' decision will hurt Alder's
balance sheet as well.
The companies had presented encouraging results last year from a
phase IIb study (n=418) on the candidate in adults with
moderate-to-severe active RA at the annual meeting of the American
College of Rheumatology. The dose-ranging study assessed the
efficacy and safety of the subcutaneous version clazakizumab alone
or in combination with methotrexate (MTX).
The patients had responded inadequately to MTX therapy. Data
revealed that treatment with clazakizumab (both as monotherapy and
in combination with MTX) across all doses met the primary endpoint
of a higher ACR20 response at 12 weeks compared to MTX alone.
We believe that the loss of a partner like Bristol-Myers, a
major player in the biopharmaceutical field with substantial
experience in RA drugs, is a big blow for Alder. It also throws the
future of the RA candidate into uncertainty. We expect Alder
to struggle to take the candidate forward into late stage
development all by itself. We expect investor focus to remain on
the future of clazakizumab going forward.
Bristol-Myers carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the biopharma space include Celgene Corp. (
) and Gilead Sciences (
). Celgene holds a Zacks Rank #2 (Buy) while Gilead sports a Zacks
Rank #1 (Strong Buy).
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