Bristol-Myers Squibb Company (BMS) announced an agreement with Otsuka Pharmaceutical Co, Ltd to extend the US portion of the companies' long-standing agreement for the development and commercialisation of Abilify (aripiprazole) from the currently scheduled end date of November 2012 until the expected loss of exclusivity in April 2015. In addition, the companies have established an oncology collaboration for two Bristol-Myers Squibb products -- Sprycel (dasatinib) and Ixempra (ixabepilone).

"The announcement is further evidence that Bristol-Myers Squibb is delivering on its commitments to advance its transformation to a leading next-generation BioPharma," said Lamberto Andreotti, president and chief operating officer, Bristol-Myers Squibb. "The agreement with our long-standing and valued collaborator Otsuka will help build our earnings base for 2013 and transition us to an expected period of growth in 2014 and beyond. Further, our balance sheet remains strong, which allows us to pursue business development opportunities as part of our String of Pearls strategy."

"We are very pleased to continue our important work with Otsuka on Abilify. Our collaboration to develop this medicine that helps people with serious mental disorders has resulted in it becoming one of the industry's most successful products," he continued. "The expanded agreement also provides an opportunity for Bristol-Myers Squibb and Otsuka to work together in oncology. We believe that sharing our collective resources will benefit the cancer patients we serve."

Under terms of the agreement Bristol-Myers Squibb will pay Otsuka an up-front cash payment of $400 million. Beginning on January 1, 2010, the share of Abilify US net sales Bristol-Myers Squibb will receive will change from 65 to 58 per cent for 2010; 53.5 per cent for 2011; 51.5 per cent for 2012. During this period Otsuka will be responsible for 30 per cent of expenses related to the commercialization of Abilify compared to having no responsibility under the existing collaboration agreement. Beginning January 1, 2013, and through the expected loss of US exclusivity in 2015, Bristol-Myers Squibb will receive 50 per cent of net sales up to $2.7 billion and a declining tiered share of net sales above $2.7 billion.

Otsuka will be responsible for 50 per cent of commercialization expenses during this period. Beginning in 2010, Bristol-Myers Squibb and Otsuka will collaborate on two oncology assets Sprycel and Ixempra as follows: Otsuka will share in commercial expenses for the US, Europe and Japan and co-promote Sprycel with Bristol-Myers Squibb in the US, Japan and major EU markets; Bristol-Myers Squibb will pay Otsuka a collaboration fee on aggregate annual net sales of Sprycel and Ixempra beginning in 2010 on a regressive tiering basis through 2020.