How a $150,000 Drug Created with Bristol-Myers Squibb Saved Ono Pharma

How a $150,000 Drug Created with Bristol-Myers Squibb (BMY) Saved Ono Pharma
March 4, 2016
By Alex Keown, Breaking News Staff

CHICAGO -- The U.S. Food and Drug Administration (FDA) approval of Opdivo, a PD-1 inhibitor to treat patients with melanoma as a type of lung cancer, turned around the fortunes of one of its manufacturers.

Japan-based Ono Pharmaceuticals, which co-developed the immuno-therapy with Bristol-Myers Squibb, is seeing new life, Bloomberg reported. Analysts are projecting the company, which has seen slumping sales for years, will more than double its revenue by about $3 billion by 2018, according to Bloomberg. Opdivo’s approval marked the first time in more than a decade that Ono was able to get a drug past regulatory hurdles. Bristol-Myers markets Opdivo in North America, as well as other parts of the world. Ono receives about 4 percent of the revenue generated in North America and 15 percent from sales in other parts of the world, Bloomberg said.

In December 2014, Opdivo was approved by the FDA for patients with advanced melanoma who no longer respond to other drugs, or cannot be treated via surgery. In March 2015, it was approved for treatment of patients with metastatic squamous non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. The drug is currently undergoing a Phase III trial in combination with another BMS cancer drug, Yervoy. Opdivo is an immuno-therapy drug delivered via injection that harnesses the patient’s own immune system to fight cancerous cells. Opdivo works by inhibiting the cellular pathway known as PD-1 protein on cells that blocks the body’s immune system from attacking cancerous cells.

Ono is studying Opdivo for use in more than 20 different kinds of cancer, including some blood cancers, Bloomberg said. In an interview with Bloomberg, Ono’s Chief Executive Officer Gyo Sagara said the company’s priority “is to get approval for gastric cancer, esophageal cancer and head and neck cancer in Japan.”

Ono and Bristol-Myers are using Opdivo to challenge Merck ’s cancer drug Keytruda, which has shown efficacy in treating at least three types of cancer. Ono and BMS have filed a lawsuit against Merck, alleging that Keytruda infringed on Opdivo’s patent. Merck has said it is confident it will prevail over the challenge. Even if Merck prevails. Opdivo has an advantage over Keytruda, which requires patients pass a regulatory diagnostic before being prescribed the medication. BMS’ treatment does not have that restriction, which may make it preferable to prescribe, according to an analysis by the Motley Fool’s Cory Renauer.

Opdivo, which is being heavily advertised in the media, had sales near $1 billion in 2015, but analysts predict it could go much, much higher, hitting nearly $13 billion annually within a few years. According to Bloomberg estimates, Opdivo costs patients in the United States about $12,500 per month and $150,000 annually. In Japan, Opdivo costs about $10,200 per month for melanoma, and $22,800 a month for lung cancer.

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