Bristol-Myers Squibb entered a global agreement that could result in the drugmaker making payments of over $1 billion for the exclusive rights to develop and commercialise Alder Biopharmaceuticals' monoclonal antibody, ALD518, which has completed Phase IIa testing for the treatment of rheumatoid arthritis, the companies announced Tuesday.

Under the agreed terms, Bristol-Myers Squibb will make an upfront cash payment of $85 million to Alder, while the biotechnology company is eligible for development milestone payments of up to $764 million across a range of indications, as well as sales-based milestones that could exceed $200 million. Alder will also receive sales royalties if ALD518 is approved. The deal grants Bristol-Myers Squibb global rights for all potential indications except for cancer, and includes an option under which Bristol-Myers Squibb can choose to co-develop and co-market the drug for cancer outside the US.

In addition, the companies noted that Alder retains an option to require Bristol-Myers Squibb to make an equity investment of up to $20 million if Alder launches an initial public offering.

Jeremy Levin, a senior science executive at Bristol-Myers Squibb, said that ALD518 "should have superior efficacy and safety to anything that currently exists, including Orencia," the company’s marketed rheumatoid arthritis drug, which generated $434 million in sales in the first nine months of 2009.

Reference Articles

Bristol-Myers Squibb and Alder Biopharmaceuticals enter global agreement on rheumatoid arthritis biologic - (BMS)

Bristol-Myers buys rights to RA drug $85 million - (Forbes)

Bristol-Myers signs development deal with Alder - (New York Times)

Bristol in deal to develop Alder's arthritis drug (free preview) - (The Wall Street Journal)

Bristol licenses arthritis drug - (TheStreet.com)