BMS, AZ To Buy Amylin

Bristol-Myers Squibb will buy Amylin Pharmaceuticals for approximately $5.3 billion. BMS will also take on $1.7 billion in Amylin’s net debt and a contractual payment obligation to Lilly, making a total transaction of $7 billion. Amylin’s primary focus is on the research, development and commercialization of a franchise of GLP-1 agonists, for the treatment of type 2 diabetes. BMS’ buyout price rose 41% from its initial bid earlier this year.

Once the deal is complete, AstraZeneca will pay BMS $3.4 billion in cash to extend the companies’ diabetes collaboration. Profits and losses arising from the collaboration will be shared equally. In addition, AZ will have a $135 million option to establish equal governance rights over “key strategic and financial decisions” regarding the collaboration.

“Amylin’s innovative diabetes portfolio, talented people and state-of-the art manufacturing facility complement our long-standing leadership in metabolics,” said Lamberto Andreotti, chief executive officer, BMS. “We are pleased to be able to strengthen the portfolio we have built to help patients with diabetes by building on the success Amylin has had with its GLP-1 franchise. The acquisition of Amylin by BMS is also a unique way for BMS and AZ to expand the alliance between the two companies, and it demonstrates BMS’ innovative and targeted approach to partnerships and business development.”

Simon Lowth, AZ’s interim chief executive officer, added, “This is a compelling proposition that will have an immediate positive impact on revenues and is fully in line with our stated partnering strategy to enhance top-line growth and strengthen our late stage pipeline. The broadening of our diabetes collaboration with BMS is another important step towards creating a leadership position in the treatment of a disease with growing unmet medical need that is reaching epidemic proportions in many areas of the world. The combined development, regulatory and commercial strengths of the AZ and BMS alliance for diabetes provides an excellent platform to unlock the potential of Amylin’s differentiated treatments for the benefit of patients worldwide and for our shareholders.”

Amylin’s main product is Byetta, a twice-daily injectable GLP-1 treatment for type 2 diabetes that generated $518 million in 2011 sales. Amyline received approval for a weekly version, Bydureon, in January 2012, after several regulatory delays. Metreleptin, a leptin analog, is under review at the FDA for the treatment of diabetes and/or hypertriglyceridemia.

In November 2011, Amylin and Lilly dissolved their diabetes alliance, after Lilly formed a development and commercialization pact with Boehringer Ingelheim.