Bristol-Myers Squibb’s (NYSE:BMY) $7 billion acquisition of Amylin Phramaceuticals (NASDAQGS:AMLN) is one of the largest diabetes deals for the year to date. Given Bristol-Myers Squibb’s and AstraZeneca’s (NYSE:AZN) five-year-old diabetes drug development alliance, the latest deal stands to position them in stronger competition with Sanofi, Novo Nordisk and Merck.
As part of the deal, AstraZeneca will pay $3.4 billion to Amylin, which becomes a subsidiary of Bristol-Myers Squibb, according to a company statement. It also includes $1.7 billion of debt and payment obligation to Lilly, whose marketing agreement with Amylin ended earlier last year.
Collaborations are nothing new in the pharmaceutical industry but the model seems to be evolving, as the M&A market continues to heat up again. Under the terms of the deal, AstraZeneca and Bristol-Myers Squibb will share the profit and losses from Amylin. If AstraZeneca forks over another $135 million to Bristol-Myers Squibb, it has the option to establish equal governance rights on key strategic and financial decisions.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
The deal gives Bristol-Myers Squibb three type 2 diabetes drugs approved by the U.S. Food and Drug Administration including one — Bydureon, an extended release version of Byetta — just approved in January. Bydureon and Byetta are glaucagon-like peptide receptors, part of a class of drugs designed to help regulate blood sugar. Bydureon also carries a black box warning that it was shown to create an increased risk of thyroid c-cell tumors in rats, though has not yet been found to have this effect in humans. Symlin is a synthetic version of the hormone Amylin to improve glucose control.
It also includes metreleptin, a version of the hormone leptin to treat diabetes and a condition in which people have high levels of triglycerides in the bloodstream because of a rare form of lipodystrophy. The disease, which can be inherited or acquired, leads to loss of subcutaneous fat. Amylin filed a biologics license application with the FDA in April with a priority review request.
Bristol-Myers Squibb’s strategic alliance with AstraZeneca has produced a least one FDA-approved diabetes drug — Onglyza, approved as a combination therapy with insulin to improve blood sugar in adult patients with type 2 diabetes. It is also continuing to develop dapaxaflogan, an SGLT2, or sodium-glucose co-transporter 2, protein inhibitor to lower blood sugar levels by causing it to be excreted through urine. The once-a-day medication blocks protein and the return of high levels of glucose in the body and helps with weight loss, and received a complete response letter earlier this year.
Novo Nordisk had 27 percent of the diabetes drug market last year and racked up more than $9 billion in sales. That compared with $622 million from Amylin and $583 million from Bristol-Myers, according to EvaluatePharma figures cited by The Wall Street Journal.
Annual global sales of diabetes drugs are projected to grow to $58 billion by 2018, according to EvaluatePharma, up from $35 billion last year, which is in line with an estimated 346 million patient population poised to grow significantly more.
