Bristol-Myers Squibb’s failure to acquire ImClone, a deal which the pharma giant claimed to be “a strategically and financially sound add-on”, throws open the question as to whether BMS remains committed to an oncology-based biotech acquisition to bolster its pipeline.

Assuming BMS keeps faith with this strategy, yesterday’s official statement referred to “other alternatives open to the company” as part of the reason to abort the ImClone deal, an analysis of peer group data from EvaluatePharma reveals a handful of companies that may provide a suitable alternative for BMS, including  Alexion Pharmaceuticals, PDL BioPharma and  Medarex. 

Flush with cash

Including the $1bn BMS will receive when Eli Lilly completes its acquisition of  ImClone, the group is expected to hold around $9.4bn in cash by the end of the year. In this context, all the following companies are comfortably within BMS’s purchasing power, especially in light of the recent declines for most biotech stocks.

This analysis includes companies with an attractive monoclonal antibody platform technology, antibody candidates in mid-to-late stage clinical trials to treat various cancers, and ones that also still have a market capitalisation greater than $500m. 

A notable exception from this analysis is Biogen Idec, but its enterprise value of $14.5bn means additional financing would be required. Add to this the fact BMS’s nemesis in the ImClone deal, Carl Icahn, has already tried and failed to sell the company last year, the biotech is unlikely to attract BMS’s interest for now.

Alexion’s sound track record

One of the few biotech stocks to have held its own this year, even reaching a five-year high of $47.50 in August, Alexion’s success has been based around a monoclonal antibody, Soliris (eculizumab), used to treat a rare blood cell disorder and forecast to generate sales of $873m by 2014.

With this antibody alone worth $2.75bn to Alexion, according to EvaluatePharma’s NPV Analyzer, coupled with a phase II antibody ALXN6000 in development to treat chronic lymphocytic leukaemia, BMS could be interested.

Hijack PDL’s spin-off?

PDL BioPharma is currently spinning off its biotech assets into a new company but still holding the rights to its monoclonal antibody technology platform, along with a number of partnered antibody candidates in phase II trials. (PDL BioPharma's final shape is emerging, August 27, 2008)

Having recently struck a broad deal with PDL worth up to $1.16bn for phase I antibody elotuzumab to treat multiple myeloma, along with rights to pre-clinical antibody  PDL241, BMS could now be tempted to step in and offer to buy the spin-off entity from PDL.

Medarex’s broad pipeline

Another company that BMS already holds a relationship with is Medarex, through a deal struck in 2004 to develop ipilimumab to treat melanoma, although unconvincing phase III trial data has significantly dented the drug’s commercial prospects. (Confidence in Medarex's ipilimumab dented again, April 28, 2008)

Nevertheless, with Medarex’s broad pipeline of partnered and in-house antibody candidates valued at $1.5bn, compared to a market capitalisation of $692m as shares now trade at four-year low levels, BMS could opt to extend their relationship with the biotech company, in a similar vein to the rationale for approaching ImClone.

Whoever BMS does end up targeting, with Seattle Genetics and to a lesser extent  Human Genome Sciences also representing viable alternatives, the company will have to be absolutely sure of clinching the deal as the market is unlikely to take kindly to a second acquisition failure.