Bristol-Myers & CytomX Therapeutics Join Forces - Analyst Blog

Bristol-Myers Squibb Company BMY entered into a strategic global research collaboration and license deal with biotech company, CytomX Therapeutics, for the discovery, development and commercialization of new drugs against multiple immuno-oncology targets with the help of the latter's Probody platform.

Probodies (monoclonalantibodies) are activated only in the cancer microenvironment and spare healthy tissue. Bristol-Myers will have exclusive rights to develop and commercialize Probodies for up to four cancer targets.

Under the terms of the immuno-oncology deal, Bristol-Myers will shell out $50 million as up-front payment to CytomX. Moreover, the biopharma major will cover the research expenses over the duration of the research period. The deal also includes preclinical milestone payments (amount of which was not specified) in addition to regulatory and sales milestone payments of about $298 million per target to CytomX. CytomX will also receive tiered mid-single-digit to low-double-digit royalties on future sales.

Immuno-oncology – An Area Attracting Great Interest

The deal further highlights the growing interest in the field of immuno-oncology, an area of expertise for Bristol-Myers. Bristol-Myers already has several marketed products like Yervoy and Sprycel. CytomX Therapeutics is not the only company to tie-up with the biopharma major targeting the lucrative immuno-oncology field. Earlier in the month, Celldex Therapeutics CLDX inked a deal with Bristol-Myers focusing on the above market. Celldex collaborated with Bristol-Myers for the development of varlilumab and Bristol-Myers' nivolumab in a phase I/II study. Five Prime Therapeutics FPRX is another company to have inked an immuno-oncology deal with Bristol-Myers. The deal was signed in March this year.

We note that immuno-oncology has been attracting a lot of interest with several companies pursuing treatments in this area.

Bristol-Myers carries Zacks Rank #3 (Hold) stocks. A better-ranked stock in the large-cap pharma space is Allergan AGN with a Zacks Rank #1 (Strong Buy).