On Jan. 3, 2019, Bristol-Myers Squibb Co. announced its proposed acquisition of Celgene Corp. for approximately $74 billion. The Federal Trade Commission issued requests for additional information and documentary materials to the companies on March 25, 2019, that were “focused on marketed and pipeline products for the treatment of psoriasis.”
In order to address the FTC’s concerns, BMS plans to divest Celgene’s Otezla (apremilast) drug, which is a phosphodiesterase-4 inhibitor indicated for the treatment of moderate to severe psoriasis and psoriatic arthritis. Psoriasis is an autoimmune disease with multiple subtypes, with large skin plaques being the most common manifestation.
Bristol does not currently have a product on the market that competes with Celgene’s Otezla. However, Bristol is developing a drug labeled BMS986165 to treat psoriasis by targeting the tyrosine kinase 2 inhibitor. The drug is currently undergoing Phase III trials, which is the last phase of required U.S. Food and Drug Administration clinical testing.
On average, drugs in Phase III trials have a 58% chance of conversion to a new drug application, the supermajority of which — 86% — are approved and marketed. This means that statistically BMS-9866165 has about a coin toss chance of actually making it to market (49.88%). As such, it seems likely that the FTC is concerned about the potential of future competition between Otezla and BMS’ pipeline drug.
Otezla presently competes with Johnson & Johnson’s Stelara, Novartis’ Cosentyx, Pfizer’s Xeljanz and many additional treatments across multiple product classes, including small molecule drugs and injectable and infusion biologics. From a medical treatment standpoint this appears to be a crowded competitive landscape, which begs the question of why a divestiture is necessary.