Bristol-Myers Squibb has signed two new agreements with its old partner Exelixis which could be worth be up to $565 million to the US biotech.

The first deal will see Exelixis grant B-MS an exclusive license to its small-molecule TGR5 agonist programme. Cashwise, it will receive a $60 million upfront fee to Exelixis, and up to $250 million in milestone payments; TGR5 is a protein found in the gall bladder and intestine that may help in the treatment of metabolic diseases, specifically diabetes.

The second agreement involves a collaboration to discover small-molecule ROR antagonists which have potential as anti-inflammatory compounds. B-MS  will pay up to $255 million and Exelixis is granting rights to the ROR programme in exchange for B-MS waiving rights to receive a third Investigational New Drug candidate as agreed to under a collaboration signed in 2006 in the area of oncology.

The firms also revealed that Exelixis is opting out of further co-development of XL139, a cancer treatment and they have also made "minor amendments" to their XL281 (cancer) and liver X receptor agreements. Exelixis chief executive Michael Morrissey said the latest pacts "leverage our discovery expertise with the development expertise of B-MS in inflammation and metabolic diseases, and provide important additional resources for us to continue our focus on our clinical stage development pipeline".

The expanded Exelixis pact was announced just as B-MS chief executive Lamberto Andreotti gave an interview to the Financial Times where he said the firm will continue focusing on innovative drugs and not diversify into new areas.

B-MS keeping business model

He told the newspaper that “we want the best of pharma – the global dimension, tradition, experience with regulation and what to do with small molecules – with the best of biotech – continuing to be more agile and innovative.” Mr Andreotti added that he is examining “appropriate ways” of dealing with the pending patent expiry of the bloodthinner  blockbuster Plavix (clopidogrel) marketed with Sanofi-Aventis, adding that the partnership with the latter had encouraged B-MS to develop alliances with other peers such as Pfizer for the blood clotter apixaban and AstraZeneca for the diabetes pill dapagliflozin.

“Partnerships allow us to risk-share and build on our respective strengths more than either company could do alone,” he told the FT. “We will partner for products that require big resources, in primary care,” although “the majority of speciality products” do not require such pacts.

Commenting on Mr Andreotti's interview, Janet Knowles, head of the UK BioPharma team at international law firm Eversheds, noted that there have been "mergers galore in the sector" and with many of "the larger pharmas moving into generics as well... it is interesting to see B-MS setting out its stall so clearly and concentrating on novel drugs and biologicals". She added that the firm "clearly sees benefit in continuing to differentiate itself from the generics businesses".