Thursday, May 17, 2007

A June Wedding for Bristol/Sanofi?

Something tells me that talk of a potential acquisition of Bristol-Myers Squibb by Sanofi Aventis will heat up again in exactly one month.

The on again/off again speculation about a merger of the Plavix partners is decidedly off at the moment. And yes, yes, I know that my fellow IN VIVO bloggers think that Bristol's deals with AstraZeneca and Pfizer will make a Sanofi bid economically dumb. But two events coming up in mid-June could spur some desperate action.

For Richer, For Poorer

On June 15, BMS expects to be officially released from the terms of a deferred prosecution agreement it signed two years ago. The DPA has been the sword of Damocles hanging over Bristol, making it essentially untouchable for would-be-suitors—especially once Bristol ran into further trouble with its spectacularly misguided attempt to settle patent litigation over Plavix.

Bristol has now agreed to settle charges arising from that debacle—and says it has been assured that the deferred prosecution agreement will be released on schedule as long as it stays out of trouble between now and June 15. (That seems easy enough, but given Bristol’s history, its probably best not to count the chickens just yet…)

And, since “interim” CEO Jim Cornelius pulled off a Dick Cheney style CEO search—ending with himself as the new CEO—there is no reason to assume that Bristol is committed to independence for the long run.

But the real impetus for renewed speculation will probably come two days before June 15, when Sanofi Aventis’ much touted obesity therapy rimonabant goes up before an FDA advisory committee.

Sanofi insists the meeting is a good news event for the troubled application. Maybe. But given the company’s misreadings of FDA so far, Sanofi’s optimism probably shouldn’t inspire too much confidence. I think Kate Rawson has it right in the May issue of The RPM Report: Sanofi will be lucky if the drug gets even a strong minority support from the committee.

This does not seem to be a good time to take a big drug before an FDA advisory panel. Especially one with a safety signal. Perhaps most especially one with a safety signal (in this case depression) that dovetails with a major focus of congressional scrutiny. Did you see what happened to Arcoxia?

If rimonabant suffers a similar setback before the committee, Sanofi will be under even more pressure to make another move. So expect the merger speculation to heat up just before summer arrives.

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