Bristol-Myers Squibb's (NYSE: BMY) $2.5 billion purchase of Inhibitex may go down as the most epic failure by a drugmaker. Ever.
It probably cost Pfizer (NYSE: PFE) more to license its inhaled insulin Exubera from Nektar Therapeutics (Nasdaq: NKTR), including paying off Sanofi in the process, but the fallout from Bristol's Inihibitex acquisition was quicker (less than a year!) and at least Exubera made it to market even if it was a flop.
Bristol said yesterday that it was discontinuing development of hepatitis C treatment BMS-986094, which Inhibitex called INX-189. The pharma previously announced that it was putting the drug on hold because a patient in one of the trials suffered heart failure.
Turns out the safety signal was much more serious than that. The patient subsequently died and another eight patients have been admitted to the hospital for unexpected events including heart and kidney toxicity. Two patients remain in the hospital.
There's no way to come back from a track record like that; cutting its losses and moving on is the only option at this point. Bristol will take a $1.8 billion charge related to the failed drug.
The news puts poor Idenix Pharmaceuticals (Nasdaq: IDIX), which has a drug in the same class as BMS-986094, in a more precarious situation. Even if it's only guilt by association, the seriousness of BMS-986094's safety issues means Idenix will have to distance IDX184 further away from Bristol's drug before the Food and Drug Administration will allow the biotech to begin clinical trials again.
IDX184 isn't dead yet, but proving that it doesn't have the same side effects as BMS-986094 won't be easy. And even if preclinical experiments convince the FDA to let Idenix restart trials in humans, the agency may require the company to restart slowly to limit the number of patients exposed.
Bristol still has other hepatitis C drugs, including daclatasvir, but with hepatitis C treatment moving toward cocktails, Bristol needs to find a new drug to combine daclatasvir with. Gilead Sciences (Nasdaq: GILD) has already said it's not all that interested.
Rather than buying a drug, maybe Bristol should sell its hepatitis C drugs. Of course then it risks getting on the list of epic failures for letting a blockbuster get away.
