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How Big Is Bristol Myers Squibb's Latest FDA Approval?

By Keith Speights and Brian Orelli, PhD - Updated Jun 22, 2021 at 3:43PM

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It's an important win for a drug gained in the Celgene acquisition to reach blockbuster status.

Bristol Myers Squibb (BMY -0.55%) recently picked up another U.S. Food and Drug Administration (FDA) approval for Zeposia in treating ulcerative colitis. In this Motley Fool Live video recorded on June 2, Motley Fool contributors Keith Speights and Brian Orelli discuss just how big this FDA win is for Bristol Myers Squibb.

Keith Speights: The FDA recently approved Bristol Myers Squibb's Zeposia. It's also known as ozanimod. This approval was for treating ulcerative colitis. This is Bristol Myers Squibb's first win in a gastrointestinal indication. Brian, how big is this for the company?

Brian Orelli: Yes. This is Celgene's old multiple sclerosis drug and it had some issues with the FDA. The FDA gave it a Refuse to File, you recall, because they had some issues with the breakdown products. They hadn't characterized the products that gets broken down once it goes into the humans. It did eventually get approved for multiple sclerosis in March of 2020.

Now in ulcerative colitis, I think it's going to have a lot of competition. There are quite a few drugs that are approved for that indication. There's three different TNF inhibitors; Remicade and Simponi from Johnson & Johnson, and Humira from AbbVie, and then Takeda and Johnson & Johnson also have other biologics that are approved for ulcerative colitis.

That's just the biologics. This is progressive disease, and patients would start on generic anti-inflammatory drug, and then move up maybe to small molecule branded drugs, something like Xeljanz from Pfizer.

I think between the competition and then also the class of drugs that Bristol Myers' drug is in has had some hard side effects. I think that's going to cause the drug probably to be a last-line treatment. I think that that could cause some serious problems in terms of getting any reasonable amount of sales from this drug.

Some doctors will use it, and it definitely worked in the clinical trials, although they only tested it against placebo. I think if they had tested it head-to-head against some other drug in the class and it had beat that drug, then you could see doctors rushing to it more. But right now, I think it'll probably be a wait-and-see and only use it in patients who aren't responding to a lot of the other drugs.

Speights: Back in the day before Celgene was acquired by Bristol Myers Squibb, Celgene was predicting that Zeposia, or at the time, ozanimod, could reach peak sales of $4 to $6 billion dollars. I don't think that rosy of an outlook is applicable, and now, for some of the reasons you just mentioned, Brian, you still think this drug might be a blockbuster for Bristol Myers Squibb?

Orelli: I think that probably between multiple sclerosis and ulcerative colitis, I think it probably could be a blockbuster, but certainly not coming out of the gate. It will probably be toward the end of its patent life, it could hit blockbuster status probably.

Brian Orelli, PhD has no position in any of the stocks mentioned. Keith Speights owns shares of AbbVie, Bristol Myers Squibb, and Pfizer. The Motley Fool owns shares of and recommends Bristol Myers Squibb. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
BMY
$74.15 (-0.55%) $0.41
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$48.58 (-1.40%) $0.69
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$166.77 (-0.48%) $0.81
AbbVie Inc. Stock Quote
AbbVie Inc.
ABBV
$141.29 (-0.11%) $0.15
Takeda Pharmaceutical Company Limited Stock Quote
Takeda Pharmaceutical Company Limited
TAK
$14.18 (-0.14%) $0.02

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