Bristol-Myers Squibb spent $2.5 billion to acquire an experimental hepatitis C drug earlier this year, but the bet does not look good after the company stopped a clinical trial because one patient died and others were hospitalized.
Last week, BMS said it would take a $1.8 billion charge in the third quarter related to the research efforts.
BMS bought Inhibitex, a Georgia company that had developed the treatment now known as BMS-986094.
“Bristol-Myers paid a fortune for a pearl that turns out to be fake,” Erik Gordon, a University of Michigan business professor who follows the health industry, told Bloomberg, referring to the company’s “string of pearls” name for its acquisition strategy. “The Inhibitex acquisition shows the dangers of paying huge premiums for late-stage drug candidates in hot areas. They still can fail.”
The link to the Bloomberg story is here.
In a statement from Bristol-Myers Squibb, Dr. Elliott Sigal, executive vice president and chief scientific officer, said, “The decision to halt development of BMS-986094 has been guided by our overriding interest in protecting patients. In the interest of all patients participating in hepatitis C clinical studies, and in cooperation with the FDA, we will make relevant information on BMS-986094 available to inform the development of other investigational compounds to treat hepatitis C. We will also work expeditiously to share the results of our further investigations more broadly in the medical and scientific community.”
Philadelphia attorney Stephen Sheller represents Janet Vella, who experienced heart and liver failure, and other clients including the family of the patient that died.
"The complaint states that the company had a duty to exercise reasonable care and breached that duty by failing to warn trial participants of the dangers of the defective drug" Sheller said in a statement. "The plaintiff claims that in the company's quest to be first, to grab a portion of the $20 billion a year market, they rushed clinical trials without fully evaluating the risks and benefits of the drug."