(Reuters) – The U.S. Food and Drug Administration on Thursday approved Bristol-Myers Squibb Co’s multiple sclerosis (MS) treatment, Zeposia, but its launch will be delayed due to the coronavirus outbreak, the drugmaker said.
The drug, also known as ozanimod, was added to the U.S. drugmaker’s portfolio through its $74 billion acquisition of Celgene last year and its approval was one of the three conditions set for a potentially higher payout for Celgene investors.
As part of the deal, Celgene shareholders have received a “contingent value right” worth $9 per share if three high-profile drugs in the company’s pipeline receive U.S. approvals by March 2021.
The company said it would continue monitoring the outbreak and partner with the neurology community to inform its decision on the drug’s launch. It did not immediately respond to Reuters’ request for comment on the drug’s price.
Despite the delay, the approval brings the company into a highly lucrative market where rivals have recorded blockbuster sales.
Novartis AG’s Gilenya brought in sales of over $2 billion in 2019, while the Swiss pharma major’s new MS treatment, Mayzvent, recorded sales of $17 million in the first quarter of its launch.
The drug is approved to treat relapsing forms of multiple sclerosis that are characterized by attacks where neurological function worsens.
Multiple sclerosis, which affects nearly 1 million people in the United States, is a potentially disabling disease in which the immune system attacks the protective myelin sheath that covers the nerves.
The drug helps reduce the migration of lymphocytes, or white blood cells, to the brain and the spinal cord, which the company says might be the likely reason for its therapeutic affect. However, the exact mechanism of the drug is unknown.
The approval comes when sales of Bristol-Myers’ most important growth driver, cancer drug Opdivo, appear to have slowed, under pressure from Merck & Co Inc’s Keytruda.
Sales of Opdivo have hovered around the $2 billion mark for most of last year but slipped to $1.76 billion in the latest reported quarter.
Through the Celgene deal, Bristol has also gained access to Celgene’s cash cow, Revlimid, which faces patent expiration in the United States in 2027.
Shares of the company were up 1.3% at $50 in trading before the bell.
Reporting by Manas Mishra in Bengaluru; Editing by Vinay Dwivedi and Anil D’Silva