Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Bristol-Myers Squibb Co (BMY) Sues Merck & Co., Inc. (MRK) Over Cancer Drug, Position Strong

Bristol-Myers Squibb Co (NYSE:BMY) along with Ono Pharmaceutical launched a lawsuit against Merck & Co., Inc. (NYSE:MRK) last Thursday, claiming that the company’s new cancer drug Keytruba (which was approved by the FDA the same day) violates their patent for a cancer drug that alters the body’s immune system to enhance its ability to fight the disease. Speaking on CNBC yesterday, Vamil Divan, Senior Analyst, U.S. Pharmaceuticals at Credit Suisse discussed the lawsuit, and believes Bristol-Myers Squibb Co (NYSE:BMY) to have a good case.

Bristol Myers Squibb Co. (NYSE:BMY)

“The whole patent estate that Bristol-Myers and their partner Ono have put together; we do think they have a pretty strong position here. Not uncommon at all in drug cases to see the different parties arguing that their patents hold or shouldn’t hold. So not surprising, and certainly not surprising to see Bristol and Ono file suit against Merck, given the patent that they have in place,” Divan said.

The implications of the lawsuit will be immense, given that the market for immunotherapy cancer drugs is expected to be a $30 billion one annually within the next decade. While Divan doesn’t think the lawsuit will outright prevent Merck & Co., Inc. (NYSE:MRK) from selling their drug, he believes it could result in royalties being paid to one or both companies.

“We wouldn’t expect, you know this could be the kind of thing some people would argue that maybe Bristol could prevent Merck from even launching the product; we don’t expect anything like that to happen, but it could be the kind of thing where Merck ends up paying some royalties back to Bristol-Myers and/or to Ono. And based on what we’ve seen historically, it could be in the 5%, 10% of sales range, but we’re talking about a $30 billion type class or $10 billion from this one type of immunocology asset like what Merck has. It could be meaningful revenues for both Bristol and Ono down the road if they do end up winning,” Divan said.

The Merck & Co., Inc. (NYSE:MRK) drug, generic name pembrolizumab, targets and blocks a receptor in the cells of the immune system called programmed death receptor 1 (PD-1). Blocking PD-1, which has been shown to negatively regulate T cell responses, gives the immune system more power to destroy cancerous cells. Ono’s own PD-1 blocking cancer treatment, nivolumab, has successfully treated patients with various forms of cancer in clinical trials, including melanoma, which Merck & Co., Inc. (NYSE:MRK)’s new drug is being targeted as a treatment for.

It’s expected that the broad set of patents Bristol-Myers Squibb Co (NYSE:BMY) and Ono hold on PD-1 blocking treatment methods will lead to generous royalties for the two companies from competitors like Merck & Co., Inc. (NYSE:MRK), as more drug companies make similar treatments in the future.

Disclosure: none

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!