My weird hunch: Novartis marries Bristol-Myers Squibb

There is no inside information and there is no any talk I can find out anywhere that anyone is predicting that Novartis (NVS) may buy out or merge with Bristol-Myers Squibb (BMS). But I got a weird hunch that this may happen in the future. I feel that the marriage between the two has a strong strategic benefit for both, especially for Novartis. Not sure anyone knows that Novartis has already overtaken the No. 1 position from Pfizer as the biggest pharma company in the world in terms of sales. However, the oncology business for Novartis is still lagging behind Roche, which is still holding its No. 1 position with a very strong oncology portfolio. It is not a secret that Novartis is aiming to catch up and trying to become the No.1 as well in Oncology, although the bar is very high. While Novartis is doing very well in expanding its oncology portfolio in the past few years, it is still lacking the leading products in the sub-sector: immune oncology. This is the area where Roche is very strong, but the leading player is definitely BMS. After many years of setback for Bristol, BMY has definitely turned itself around with a great prospect! It has especially firmly established itself as the leading company in Immune Oncology after the approval of ipilimumab, the first ever immunologic drug in the world that is fighting against the cancer cells by boosting the body own immunity. Based on what I have seen about its amazing efficacy in some reports, I had a strong conviction that ipilimumab would be approved without any problem. For those who followed my blogs, we even made some money back then when ipilimumab got approved, a prediction based on my research knowledge on this product (see here and here). Ipilimumab, or brand name Yervoy, has been hugely successful commercially since then.

Now BMS has started off a new field of immunotherapy last summer with nivolumab, aiming a new target called PD-1 (programmed death protein 1). Their initial study  showed a 40% response rate for melanoma. It also reported an more than 80% reduction in tumor size in nearly a third of advanced melanomas over 12 weeks when used in combination with Yervoy. The speed and magnitude of that response quickly put Bristol-Myers as the front runner in the field with a Yervoy/nivolumab combination drug. With this in mind, I’m thinking that Novartis can have a great leap forward and firmly establish itself as the overall leader in Oncology, if NVS can buy or merge with BMS. Strategically speaking, I think there is a great value and benefit for both companies to do so when I’m trying to think like the CEOs of both. But of course I’m no body and the financially it is totally beyond me if it makes any sense, considering BMS is not a small monkey anymore; it will be very expensive for Novartis if they want to do so.

I’m just putting this out there for my own ego as if it turns out to be the true story in the future, I could be the very first one in the world to predict this! Ha ha...