BMS and AZ Team up to Buy Amylin at Premium

This one caught me by surprise evn though it was known that Amylin was actively soliciting bids for its own acquisition.  Late Friday, Bristol Myers Squibb announced it was acquiring Amylin for $5.3 B plus paying Eli Lilly about $1.7 B in olbigations to acquire Amylin and its diabetes treatments Byetta and Bydureon. 

Then is was also announced that AstraZeneca will pay BMS $3.5 B to share in the profits of the the two drugs. The deal represented about a 10% premium over Amylin's closing price on Friday.  Some analysts were scratching their heads at the size of this deal for a company like Amylin -- that has had more than its share of trials. 

However, desperate times sometimes call for desperate measures, and there are few companies in Big Pharma land more desperate than AZ for some new products and revenue streams.  Their pipeline and R&D productivity has been characterized as the industry's worst.  At a time when key drugs are coming off patent, they need the shot in the arm so to speak and will get two diabetes drugs from the deal.

The only compnay perhaps looking at a steeper patent cliff than AZ, would be Eli Lilly. They didn't pick up any products in the deal but did get out from being owed a large debt by Amylin and now have $1.7 B more in their pockets to invest. See Xconomy, Pharmalot and PharmaGossip here and here.

Posted by Bruce Lehr Jun 30th 2012.

Comments

[Mergers & acquisitions]

I read your article and i found it very helpful.Great post indeed.Thnaks for the share..

[bigredbruce]

More commentary from Seeking Alpha July 2nd
http://seekingalpha.com/article/695431-bristol-myers-agrees-to-expensive-buyout-of-amylin-stay-away?source=feed

[bigredbruce]

More on this from Fierce Biotech this morning July 2nd, http://www.fiercebiotech.com/story/bristol-myers-outbids-big-pharma-pack-and-nabs-amylin-53b/2012-07-01

[bigredbruce]

Commentary from Seeking Alpha
http://seekingalpha.com/article/694331-amylin-bows-out-gracefully?source=feed