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BRISTOL MYERS SQUIBB CO 8-K Report (May 10, 2004)

Filed May 10, 2004For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb (BMY) announced a significant collaboration agreement with Merck & Co., Inc. on April 27, 2004, focused on the co-development and co-promotion of muraglitazar, an investigational drug for Type 2 diabetes currently in Phase III clinical trials. This partnership provides BMY with an upfront payment of $100 million, with an additional $275 million contingent on achieving regulatory milestones. The companies will share development and commercialization costs globally, with Merck receiving sales-based payments. This agreement represents a strategic move to advance a promising therapeutic candidate and leverage Merck's expertise, potentially de-risking development and accelerating market entry. The collaboration also includes a back-up compound with a similar mechanism of action, expected to enter Phase II trials this year. The agreement includes detailed terms regarding exclusivity, patent expiration (US patent for muraglitazar expires in 2020), and termination clauses, including a standstill agreement designed to prevent hostile takeovers between the two pharmaceutical giants. Investors should note the substantial financial components and the strategic implications for BMY's diabetes franchise.

Key Highlights

  • 1BMY entered into a co-development and co-promotion agreement with Merck & Co. for muraglitazar, a Type 2 diabetes drug in Phase III.
  • 2BMY received an upfront payment of $100 million, with up to $275 million in future regulatory milestone payments.
  • 3Both companies will share global development and commercialization costs for muraglitazar.
  • 4The agreement includes a back-up PPAR agonist compound that is expected to enter Phase II trials.
  • 5A standstill agreement is in place, preventing hostile acquisition activities between BMY and Merck.
  • 6The company expects to submit an NDA for muraglitazar to the FDA within the next nine to twelve months.

Frequently Asked Questions

The primary purpose is the worldwide co-development and co-promotion of muraglitazar, Bristol-Myers Squibb's investigational drug for Type 2 diabetes, which is currently in Phase III clinical development. It also includes a back-up compound with a similar mechanism of action.

Bristol-Myers Squibb received an upfront payment of $100 million in May 2004 and is eligible to receive an additional $275 million upon the achievement of certain regulatory milestones. They will also share in future development and commercialization costs.

Bristol-Myers Squibb expects to submit a New Drug Application (NDA) for muraglitazar to the U.S. Food and Drug Administration (FDA) within the next nine to twelve months.

The standstill agreement is a mutual non-aggression pact that prevents either Bristol-Myers Squibb or Merck from taking certain actions, such as acquiring or seeking to acquire the other company's voting securities or engaging in hostile takeover-related activities, as long as the collaboration remains in effect under specified conditions.