Bristol-Myers to Sell Cancer Drug Rights to Eli Lilly

Bristol-Myers Squibb Co. said Thursday that it agreed to transfer North America commercialization rights of its cancer drug Erbitux to Eli Lilly & Co.

The two pharmaceutical companies collaborated on the drug, which treats certain advanced colorectal, head and neck cancers, for 14 years.

ImClone Systems Inc., which co-developed Erbitux with Bristol-Myers as its U.S. partner, won regulatory approval for the drug in 2004. In 2008, Lilly bought ImClone for $6.5 billion. Erbitux was initially cleared to treat advanced cases of colorectal cancer. Two years later, the drug was approved to treat head and neck cancer.

"Fully bringing Erbitux into the Lilly Oncology portfolio accelerates Lilly's commitment and leadership in gastrointestinal cancers to include an effective treatment for advanced colorectal cancer as well as head and neck cancer," said Sue Mahony, president of Lilly Oncology.

The rights transfer includes full commercialization and manufacturing operational responsibilities for Erbitux in North America. The companies said in a joint statement that the transition is expected to be completed in the fourth quarter.

Bristol-Myers will receive tiered royalties based on net product sales in North America through September 2018.

In 2014, Bristol-Myers reported $723 million in revenue from Erbitux, a 4% increase from 2013 and about 4.5% the drug maker's top line. Most of that revenue came from North America.

Merck KGaA of Germany has been ImClone's European partner for Erbitux. The drug brought in $904 million for Merck last year, representing about 15% of the company's overall sales.

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