Why Struggling Bristol-Myers Squibb Could Take Out This Danish Biotech in Major €500M Deal

Published: Mar 23, 2017

Why Struggling Bristol-Myers Squibb Could Take Out This Danish Biotech in Major €500M Deal March 21, 2017
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – While speculation is running rampant that Bristol-Myers Squibb is a company ripe for a takeover, there is question that the beleaguered company might engage in its own M&A activity with Denmark-based Galecto Biotech.

Since 2014, the two companies have been working to develop Galecto’s lead asset, TD139 for the treatment of idiopathic pulmonary fibrosis. At the time of the deal worth up to $444 million, TD139 was showing promise as a novel inhaled inhibitor of galectin-3, a protein that plays a central role in types of fibrosis. Last week, the company presented data from a Phase I/IIa trial showing Galecto’s Galectin-3 inhibitor demonstrated significant results in 24 patients with PK exhibiting proportional systemic exposure who were treated with the drug. The company said it detected biomarker changes in plasma and alveolar cells. The drug was also well tolerated, Galecto said in its March 10 statement.

Under terms of the 2014 deal, BMS has a 60 day window in which it could acquire the Danish company, Labiotech reported this morning. Hans Shcambye, Galecto Biotech’s chief executive officer, said his company was in a stronger position than it was in 2014 when it first signed the deal with BMS, according to Labiotech.

That statement can’t be rightly said about BMS though. The company has been embattled since the summer of 2016 when its PD-1 inhibitor Opdivo failed to meet its endpoints in a Phase III trial as a monotherapy for a “broad patient population” in patients with previously untreated advanced non-small cell lung cancer. In March 2015, Opdivo was approved for treatment of patients with metastatic squamous non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy.

The failure of Opdivo has allowed Merck and its anti-PD-1 drug Keytruda to carve out a larger market share in lung cancer treatment.

Following the failure, BMS announced a reorganization plan of its research and development group. The company said its plans includes the implementation of a “more agile R&D organization” and “streamlined operations and realigned manufacturing capabilities that broaden biologics capabilities to reflect current and future portfolio.” The company also announced it was bringing in Thomas J. Lynch as the successor to Chief Science Officer Francis Cuss.

Although it is not yet known if BMS will pull the trigger on the Galecto deal, that company is already planning to conduct a Phase II trial of TD139 in about 300 patients, Labiotech said. Galecto is also planning to expand its portfolio with other projects in cancer, eye disease and Nonalcoholic Steatohepatitis.

BMS does have deals for the development of other fibroid drugs. In 2015 the company acquired Lexington, Mass.-based Promedior, Inc. and its lead candidate, PRM-151, is a recombinant form of human pentraxin-2 protein currently in Phase II development for the treatment of idiopathic pulmonary fibrosis (IPF) and myelofibrosis (MF).

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