Bristol-Myers Squibb Who? Why Pfizer Could be Making Googly Eyes at This Michigan Biotech Instead

Bristol-Myers Squibb Who? Why Pfizer Could be Making Googly Eyes at This Michigan Biotech Instead April 3, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Rumors that Pfizer (PFE) might acquire Bristol-Myers Squibb rose again recently, after a research note to investors by Credit Suisse analyst Vamil Divan brought it up. Based on comments Pfizer’s executive team have made, it seems likely that Pfizer is in acquisition mode. Todd Campbell, writing for The Motley Fool, makes a case that Pfizer should look to acquire Ann Arbor, Mich.-based Esperion Therapeutics .

All About Cholesterol

Campbell’s argument revolves around Pfizer’s Lipitor, the best-selling cholesterol drug in the world. The first of the drug’s patents expired in 2010, allowing generic competition.

At least partly in response to that, Pfizer spent a lot of money and resources on developing a PCSK9 inhibitor called bococizumab. PCSK9 inhibitors function differently than statins, and Lipitor is a statin. So far, there are two PCSK9 inhibitors on the market, Amgen ’s Repatha and Regeneron and Sanofi ’s Praluent.

Campbell writes, “Although Pfizer’s program was trailing, management thought it could still capture significant share if a cardiovascular-outcomes trial showed that bococizumab safely lowered the risk of heart attack, stroke, or death in cardiovascular disease patients. Unfortunately, the company announced last fall that a review of the data instead revealed safety risks that were significant enough for Pfizer to shut down the study.”

Esperion Therapeutics

This is why Campbell thinks Pfizer should take a look at Esperion, which is developing another cholesterol medicine that uses yet another mechanism of action. Its lead candidate is bempedoic acid, which is an oral formulation, and can be taken along with statins. In mid-stage clinical trials, bempedoic acid and statins combined improved bad cholesterol levels by an additional 20 percent. The drug is now in Phase III clinical studies, with data expected sometime next year. The company is also investigating whether, in addition to improving cholesterol levels, the drug decreases the risk of major cardiac events such as heart attacks and stroke, as well as death.

In addition to the strategic nature of an Esperion acquisition, Pfizer already has a previous relationship with the company (which is slightly confusing).

The founder of Esperion is Roger Newton. He led the team that developed Lipitor at Warner-Lambert. After leaving Warner-Lambert, Newton launched a biotech company in 1998 called—here’s where the confusion comes in—Esperion Therapeutics. What Campbell refers to as Esperion 1.0, reported positive results on a cholesterol drug, and Newton sold the company to—you guessed it—Pfizer for $1.3 billion in 2003.

Then in 2008, Newton created the current Esperion, what Campbell calls Esperion 2.0. He recruited many of his former team from Esperion 1.0. And that’s how they came up with bempedoic acid.

Bristol-Myers Squibb is Expensive

Any deal involving Bristol-Myers would likely cost around $100 billion. There aren’t many companies that could afford that large a deal, but Pfizer is one of them. Pfizer hasn’t been shy about taking shots at mega-mergers like the failed acquisition of Allergan . And at least part of Credit Suisse’s recent focus on Pfizer and Bristol-Myers Squibb is due to activist investor Carl Icahn taking a stake in Bristol-Myers in February, and another activist investor, Jana Partners, acquiring a stake in the last quarter of 2016.

At least some of the thinking is that BMS would make a great takeover target.

Campbell notes that, “Only Pfizer knows its M&A plans, and Esperion Therapeutics might not be for sale anyways. Nevertheless, Esperion’s team has a track record that’s M&A-friendly, and bempedoic acid’s potential market opportunity is big enough that it could interest a player like Pfizer.”

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