By the time the dust had settled on Friday's announcement that the FDA had approved Yervoy (ipilimumab) for melanoma, analysts were left clearly impressed by two key points: The FDA had extended an approval for a much larger group of patients than Bristol-Myers Squibb initially expected and at a whopping $120,000 per four-dose course, the drug developer was pushing the envelope on pricing. Add it all up and Yervoy may quickly break into blockbuster territory as Bristol pursues new studies to see how it fares in combo treatments.
FDA oncology chief Richard Pazdur was clearly impressed by the drug--a breakthrough cancer treatment that unleashes the immune system--which Bristol-Myers snagged when it acquired its partner Medarex for $2.3 billion in 2009. The agency OK'd the drug for patients who had been previously tried other therapies as well as the treatment naïve group--a move that immediately opens a major new market for the company. Tim Anderson, an analyst with Sanford C. Bernstein, estimated 2015 revenue at $1.7 billion.
"Late-stage melanoma is devastating, with very few treatment options for patients, none of which previously prolonged a patient's life," said Pazdur in a statement. "Yervoy is the first therapy approved by the FDA to clearly demonstrate that patients with metastatic melanoma live longer by taking this treatment."
For Bristol-Myers, which has outlined plans to gain approval for five new drugs by the end of 2012, the Yervoy approval also endorsed BMS's restructuring, which created a smaller company that was clearly focused on its pipeline. At a time when much larger drug companies are struggling to prove they can deliver on the drug development side of the business, BMS now has a clear win to boast of as it hunts for five new approvals by the end of 2012.
CEO Lamberto Andreotti tells the Wall Street Journal: "My R&D pays. It pays not only because we have results, but because we invest our money very carefully."
Special Report: Ipilimumab: Timeline of a melanoma drug