The rumoured link-up between Bristol-Myers Squibb and US rival Schering-Plough – which spread around the industry over the weekend – has been dismissed by analyst Gus Ando at Global Insight as being unlikely to materialise.
The two companies do not make a nice strategic fit, he maintains, and there are too many uncertainties on both sides.
Schering-Plough is in the middle of its own turnaround plan, which could be threatened by a merger with B-MS. Moreover, one of the pillars of its resurgence is the joint venture with Merck & Co for cholesterol lowering drugs Zetia (ezetimibe) and Vytorin (ezetimibe and simvastatin) and, given the rivalry between B-MS and Merck in this sector it could threaten the future of the JV.
For B-MS the critical factor is the looming threat of generic competition to antithrombotic drug Plavix (clopidogrel) is the main issue to be considered.
That said, Ando concedes that Schering-Plough has built up a warchest of cash to plug gaps in its pipeline, while B-MS is undoubtedly on the look-out for new partners under the guidance of its provisional chief executive, James Cornelius, who replaced the ousted Peter Dolan last week. If a deal with Schering-Plough is not forthcoming, says Ando, the likelihood of another offer being made for B-MS is “very high.”