Bristol Licenses Arthritis Drug: BioBuzz

PRINCETON, N.J. ( TheStreet) -- Bristol-Myers Squibb ( BMY) acquired worldwide rights to an experimental rheumatoid arthritis drug from privately held Alder Pharmaceuticals, the companies announced Tuesday.

The drug, ALD518, is an injectable monoclonal antibody that targets and blocks the production of IL-6, a molecule that plays role in the inflammation, swelling, pain and destruction of bone joints. The drug has completed a phase IIa study, to date.

ALD518 shares the same mechanism as Roche's rheumatoid arthritis drug Actemra, which is currently under review by the U.S. Food and Drug Administration.

In exchange for worldwide rights to ALD518 for all indications but cancer, Alder receives from Bristol $85 million in cash up front, and is eligible for an additional $764 million in future development and regulatory milestone. Alder will also receive royalties based on future ALD518 sales and Bristol may invest up to $20 million in a possible Alder initial public offering.

Bristol already markets a rheumatoid arthritis drug, Orencia, and has another oral drug in phase II studies, according to BioMedTracker.com

Speaking of oral rheumatoid arthritis drugs, Rigel Pharmaceuticals ( RIGL) is still seeking a partner for its phase II drug candidate, R788.

Survey the RA Treatment Landscape

Doctors expect to prescribe modest amounts of two new biologic rheumatoid arthritis drugs from Johnson & Johnson ( JNJ) and UCB over the next year, which means market share for existing drugs from Amgen ( AMGN) and Abbott Labs ( ABT) should remain relatively protected.

That's headline conclusion from a survey of rheumatoid arthritis doctors published Tuesday by Sanford Bernstein.

The recent launches of J&J's Simponi and UCB's Cimzia are expected to help grow the overall RA treatment market, but market share for each drug is only expected to reach 9% and 7%, respectively over the next 12 months, the Bernstein survey finds.

"Adoption of the new entrants looks to be gradual, consistent with their lack of an established safety profile and challenges with formulary access," the Bernstein report says.

The doctor survey furthers found that J&J's current RA drug Remicade appears most at risk to lose market share from the new drugs, while Amgen's Enbrel is the most resistant. Abbott's Humira was deemed to be the most efficacious of the current RA drugs but Amgen's Enbrel is seen as the safest and therefore the preferred top choice for first-line RA therapy, according to Bernstein.

Celgene in ASH Abstract Spotlight

(At 6:31 AM ET)

Research abstracts for next month's annual meeting of the American Society of Hematology, or ASH, will be posted online Tuesday at 10 a.m. EST. Investors will be particularly focused on details of a phase III study of Celgene's ( CELG) cancer drug Revlimid in newly diagnosed, or front-line, multiple myeloma patients.

The key question from this study -- known as MM-015 -- is how much Revlimid does a newly diagnosed multiple myeloma patient need?

Last July, Celgene announced positive top-line results from MM-015, telling investors that treatment with Revlimid plus chemotherapy followed by Revlimid "maintenance" demonstrated a statistically significant improvement in progression-free survival over treatment with chemotherapy alone.

But MM-015 also included a third arm that treated multiple myeloma patients with a fixed, nine-month course of Revlimid plus chemotherapy. To date, Celgene has released no information about the magnitude of the benefit from this so-called Revlimid "induction only" arm.

Celgene shares have been volatile of late because of worries that the benefit of Revlimid maintenance (i.e., more Revlimid) won't outweigh Revlimid induction (i.e., less Revlimid).

Revlimid turned in a strong third quarter, with sales of nearly $450 million, prompting Celgene to raise 2009 sales guidance. Investors expect Revlimid sales to grow from around $1.7 billion this year to well over $3 billion in 2013-2014. To meet these expectations for high growth, however, the treatment duration of Revlimid therapy needs to grow longer, particularly for front-line multiple myeloma patients.

The release of the MM-015 abstract for the upcoming ASH meeting in early December should start to provide answers to this important, "how much Revlimid?" question. Unfortunately, data from the Revlimid induction arm (nine months of Revlimid only) isn't likely to be ready until sometime later this year or next year.

Still, investors are likely to take comfort in Celgene by a strong progression-free survival benefit demonstrated by Revlimid maintenance, especially if that benefit stacks up well against similar data already compiled by Velcade, a competing multiple myeloma drug marketed by Takeda.

More Biotechs in the ASH spotlight

Onyx Pharmaceuticals ( ONXX) brings to ASH this year its second-generation protease inhibitor carfilzomib, which the company acquired after purchasing Proteolix in October.

Investors will be scrutinizing a response rate data from a phase II study of carfilzomib in relapsed or refractory multiple myeloma patients. Particularly important will be data on the benefit of carfilzomib treatment in a subset of patients progressing after prior Revlimid and Velcade treatment.

Ariad Pharmaceuticals ( ARIA) was upgraded Monday, in part, because of expectations for strong data at the ASH meeting from a phase I proof-of-concept study for its drug AP-24534 in chronic myeloid leukemia.

The ASH focus for Cephalon ( CEPH) this year will be on its cancer drug Treanda, specifically additional data from an investigator-led study testing a combination of Treanda plus Rituxan against Rituxan plus chemotherapy in patients with non-Hodgkin's lymphoma. Rituxan is a mainstay treatment for NHL marketed by Roche/Genentech.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

More from Stocks

Jim Cramer: Schlumberger Predicted the Rise in Oil Prices

Jim Cramer: Schlumberger Predicted the Rise in Oil Prices

Jim Cramer on Zillow's New Business: Buying and Selling Homes

Jim Cramer on Zillow's New Business: Buying and Selling Homes

Jim Cramer: Wabtec Deal Gives General Electric Optionality

Jim Cramer: Wabtec Deal Gives General Electric Optionality

Jim Cramer on the Markets: It's Natural to Have Some Profit Taking

Jim Cramer on the Markets: It's Natural to Have Some Profit Taking

Video: Jim Cramer on the Markets, Oil, General Electric, Zillow and Micron

Video: Jim Cramer on the Markets, Oil, General Electric, Zillow and Micron