Bristol-Myers Squibb Cuts Deal, Delaying Threat to Top-Selling Revlimid

Bristol-Myers Squibb (NYSE: BMY) is granting Dr. Reddy's Laboratories (NYSE: RDY) a volume-limited license to produce a generic version of its blockbuster multiple myeloma drug, Revlimid, beginning in 2022.

Previously, Bristol-Myers filed a patent-infringement lawsuit against Dr. Reddy's in an attempt to prevent the healthcare company from launching its generic version of Revlimid. In the second quarter, Revlimid produced $2.9 billion in revenue for Bristol-Myers.

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The newly inked agreement gives Dr. Reddy's the right to produce a limited amount of Revlimid beginning on an undisclosed date following March 2022, when an agreement with another generic drugmaker -- Natco -- kicks in. Restrictions limiting Dr. Reddy's production volume disappear on January 31, 2026.

The agreement allows Bristol-Myers to control how quickly Revlimid's revenue declines following its patent expiration, while also removing costs and uncertainty relating to Bristol-Myers litigation. Bristol-Myers acquired Revlimid when it bought Celgene in 2019 for approximately $74 billion.

There are over 32,000 patients diagnosed with multiple myeloma annually in the United States, making it the second most common blood cancer in the country.

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Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned.  The Motley Fool owns shares of and recommends Bristol Myers Squibb. The Motley Fool has a disclosure policy.

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