Bristol-Myers Squibb Agrees to Acquire Amylin for $5.3 Billion

Jul 01, 2012

Bristol-Myers Squibb has agreed to acquire the biopharmaceutical company Amylin Pharmaceuticals for a purchase price of $5.3 billion and an additional $1.7 billion for assuming Amylin’s net debt and a contractual payment obligation to Eli Lilly based on Amylin’s recently terminated agreement with Eli Lilly over the diabetes drug exenatide. After the closing of the acquisition of Amylin by Bristol-Myers Squibb, AstraZeneca will make a $3.4-billion payment to Bristol-Myers Squibb as part of the companies’ previously formed diabetes-drug collaboration.

Amylin’s primary focus is on the research, development, and commercialization of a franchise of GLP-1 agonists for treating Type II diabetes. Amylin and Eli Lilly had partnered for developing exenatide, the active ingredient in the diabetes drug Byetta, which was approved in the United States in 2005, and for developing a once-a-week version of exenatide, Bydureon, which was approved in the European Union in June 2011 and in the US in January 2012. In November 2011, Amylin and Eli Lilly terminated their alliance for exenatide, with worldwide development and commercialization rights transitioning back to Amylin, starting with the US in 2011 and progressing to all markets by the end of 2013. As part of that termination, Amylin agreed to make a one-time, upfront payment to Eli Lilly of $250 million and pay future revenue-sharing payments to Eli Lilly based on global net sales of exenatide products. In addition to Byetta and Bydureon, Amylin also is developing exenatide suspension formulations and a pen device for Bydureon.

Following completion of Bristol-Myers Squibb’s acquisition of Amylin, AstraZeneca will make a payment to Amylin, as a wholly owned subsidiary of Bristol-Myers Squibb, in the amount of approximately $3.4 billion as part of the diabetes-drug collaboration between Bristol-Myers Squibb and AstraZeneca. Bristol-Myers Squibb and AstraZeneca formed a collaboration in January 2007 for researching, developing, and commercializing select investigational drugs for Type II diabetes. As part of its acquisition of Amylin by Bristol-Myers Squibb, AstraZeneca also has the option, exercisable at its sole discretion following the closing of the acquisition, to establish equal governance rights over key strategic and financial decisions regarding the collaboration upon the payment to Bristol-Myers Squibb of an additional $135 million. These collaboration arrangements have been approved by the boards of directors of Bristol-Myers Squibb and AstraZeneca.

The Amylin acquisition fits strategically with Bristol-Myers Squibb’s efforts to build its diabetes franchise, which includes its diabetes collaboration with AstraZeneca. The Bristol-Myers Squibb/AstraZeneca diabetes collaboration is focused around several diabetes drugs: Onglyza (saxagliptin), Kombiglyze (saxagliptin and metformin HCI extended-release), and Forxiga (dapagliflozin), a selective and reversible inhibitor of sodium-glucose co-transporter 2 (SGLT2), a new class of diabetes drugs. In January 2012, FDA issued a Complete Response Letter regarding the companies’ new drug application for dapagliflozin and requested additional clinical data to allow a better assessment of the risk–benefit profile for dapagliflozin. In April 2012, EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending the approval of dapagliflozin. The CHMP positive opinion for dapagliflozin is under review by European regulatory authorities.

Bristol-Myers Squibb’s pending acquisition of Amylin has been unanimously approved by the boards of directors of Bristol-Myers Squibb and Amylin and is subject to customary closing conditions. Amylin has agreed not to solicit competing offers. The companies expect the deal to close approximately 30 days after commencement of a tender offer of $31.00 per share by Bristol-Myers Squibb for Amylin.