Bristol-Myers Squibb (NYSE: BMY) has signed a deal with Meso Scale Discovery to develop a diagnostic test.
In the age of companion diagnostics, that's not really all that weird. Bristol-Myers has a partnership with Dako to develop tests to identify patients that will respond to drugs the pharma is developing, and a similar deal with Saladax Biomedical. Erbitux, which it sells with Eli Lilly (NYSE: LLY), already requires a test to determine whether the drug will work on a specific cancer patient.
But the new deal with Meso seems to be for a research tool rather than something that would be used by doctors to diagnose patients for diseases, which seems like a weird thing for Bristol to sell even if it is no stranger to Alzheimer's diagnostics.
It has a deal with OPKO Health (NYSE: OPK) to identify biomarkers for neurodegenerative disorders and various malignancies including Alzheimer's disease in the hopes of developing an early diagnosis blood test. And last year Bristol-Myers expanded its deal with Saladax to include a Johnson & Johnson (NYSE: JNJ) subsidiary to help market an Alzheimer's disease diagnostic in development.
If Bristol-Myers is getting into the diagnostics space, especially in one specific area, I'd pay attention. Remember, Bristol-Myers took on an all-drugs-all-the-time strategy, getting rid of extraneous products, including a spinoff of Mead Johnson Nutrition, its baby formula business, and selling off its medical-imaging business.
Bristol-Myers trails Eli Lilly's solanezumab and the trio developing bapineuzumab -- Johnson & Johnson, Pfizer, and Elan (NYSE: ELN) -- in developing Alzheimer's disease drugs. Those should release phase 3 data soon, while Bristol-Myers' drug still has a code name, BMS-708163, and doesn't appear to have moved into phase 3 development yet.
Of course, the nice thing about developing tests to diagnose diseases is that they'll be used no matter which drug is used to treat the patient.
I'm not exactly sure what Bristol-Myers' long-term strategy is here, but I'd keep an eye on the company. One of the easiest ways to do so is through the Fool's free watchlist service. You can add Bristol-Myers by clicking here. Don't have a My Watchlist account? Sign up here for free.
