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Bristol Myers Squibb, AstraZeneca Join Forces in $7B Deal for Amylin

By Catherine Shaffer
Staff Writer

Bristol-Myers Squibb Co. (NASDAQ:BMY) and AstraZeneca plc (NYSE:AZN) have teamed up to execute a uniquely structured takeover of diabetes firm Amylin Pharmaceuticals Inc. (NASDAQ:AMLN) for a total value of $7 billion ‑ the fourth and largest billion-dollar-plus deal of 2012.

Amylin's assets include GLP-1 agonists Byetta (exenatide) and its extended release equivalent Bydureon, Metreleptin, and Symlin (pramlintide acetate) and has been on the market for acquisition for some time. Rumors flew in March over a rebuffed takeover attempt by BMY, but neither company confirmed them publicly. This time around, BMY enlisted AstraZeneca as a partner in the transaction in order to offer a price that would satisfy Amylin's investors.

Under the merger agreement, BMY will purchase Amylin stock for $31 a share, for an aggregate price of $5.3 billion. Additionally, BMY will settle Amylin's obligation to Eli Lilly and Co. for another $1.7 billion.

Upon closing of the merger, AstraZeneca will come in as a partner on Amylin assets for $3.4 billion, sharing equally in profits and losses of those assets. AstraZeneca also has the option, for another $135 million, to gain equal strategic and financial decision-making authority related to those assets.

Amylin and Lilly broke up their decade-long partnership in November 2011 as a result of ongoing litigation over Lilly's marketing of linagliptin with Boehringer Ingelheim GmbH using the same sales force that currently marketed Byetta and Bydureon.

The breakup put Amylin on the market for a new partner, and made it a very hot takeover prospect. BMY, AstraZeneca, Merck and Co. Inc., Takeda pharmaceutical Co. Ltd., and Roche AG where among the companies expected to take an interest based on compatible diabetes portfolios.

Upon closing of the merger agreement, which is deemed a sure thing by market observers, and execution of the partnership, Amylin's assets will be join AstraZeneca’s DPP-4 inhibitor Onglyza (saxagliptin) in the new entity's combined diabetes portfolio.

Other mega acquisitions of 2012 include:

• April 21: AstraZeneca acquired Ardea Biosciences Inc., of San Diego, for $1.26 billion. The cash-cow target: Ardea's lesinurad, which is currently in Phase III development as a potential treatment for the chronic management of hyperuricemia in patients with gout. (See BioWorld Today, April 24, 2012.)

• Jan 26: Having had a taste of Micromet Inc.'s BiTE antibody platform through a license agreement inked in 2011, Amgen Inc., of Thousand Oaks, Calif., paid $1.16 billion to acquire the Rockville, Md. -based company. (See BioWorld Today, Jan. 27, 2012.)

• Jan. 9: Inhibitex Inc. (NASDAQ:INHX), of Atlanta, got a $2.5 billion acquisition offer, which was completed in February, from Bristol-Myers Squibb Co., of Princeton, N.J. The target asset of that transaction was Inhibitex's hepatitis C virus therapeutic, INX-189. (See BioWorld Today, Jan. 10, 2012.)

• One more billion-dollar-plus deal waiting in the wings: GlaxoSmithKline plc (GSK), of London, made an unsolicited $2.6 billion cash offer to acquire Human Genome Sciences Inc., of Rockville, Md., in April. The offer has been rejected three times. Last week GSK extended its tender offer to acquire all outstanding shares of Human Genome Sciences for $13 per share to 5 p.m. New York time on July 20, 2012. The pharma firm said extension will give HGS shareholders the opportunity to evaluate the outcome of its board's process relative to GSK's offer. HGS' board has continued to reject the unsolicited offer, which values the biotech at about $2.6 billion, and noted that less than 1 percent of its shares outstanding tendered into the GSK offer. (See BioWorld Today, April 20, 2012, April 26, 2012, and May 16, 2012.)