Shares of Alder BioPharmaceuticals continue to fall after the company received notice from partner Bristol-Myers Squibb Company after the giant drug company determined that Alder’s experimental rheumatoid arthritis drug Clazakizumab “did not warrant further investment based on other priorities in their pipeline.”
“We view BMS’s decision as a significant opportunity for Alder,” said Alder CEO Randall Schatzman in a release. “This positions us with two programs with positive Phase II data for which we control the timelines and how we move forward with development.”
Shares of Alder have fallen 15 percent since the news was announced in a SEC filing.
Alder originally entered into an agreement with Bristol-Myers Squibb in November 2009, part of which included an $85 million upfront payment and a deal to pay for 100 percent of development costs for Clazakizumab for everything outside of cancer work. In addition to the initial capital, Alder also received milestone payments of $18.5 million, and received reimbursement for clinical supply and development costs to the tune of $26.8 million.
“We would have been eligible to receive additional development-based, regulatory-based and sales-based milestone payments and tiered royalties on net sales of Clazakizumab had the BMS Agreement not been terminated,” the company wrote in a SEC filing.
At the time of the deal in 2009, Alder said that the agreement could amount to more than $1 billion in investment by Bristol-Myers Squibb.
Alder completed an initial public offering earlier this year, pricing shares at $10. It is now trading at $14.42, with a market value of $456 million.
