This past Friday the deal between Bristol-Myers Squibb Co. and Amylin Pharmaceuticals was announced. Bristol-Myers bought out Amylin fo $5 billion cash. Both companies were eagerly looking for new developments for separate reasons. This deal falls roughly a month after the approval of the generic version of Bristol-Myer’s blood thinner Plavix. And directly after the end of a marketing relationship between Amylin and Eli Lilly & Co.
Bristol-Myers Squibb plans to team up with AstraZeneca to help evolve and brand the diabetic drugs. AstraZeneca is expected to pay $3.4 billion in cash and will share all of the companies profits as well as losses.
The high levels of obesity increases the odds of diabetes in the world. According to the Centers for Disease Control and Prevention around 280 million people around the world have diabetes. Out of those 280 million people 25.8 million are from America.
Back in March Bristol-Myers offered $22 a share but the offer was never confirmed. Now they will pay $31 per share. When the first offer was put on the table activist investor Carl Icahn didn’t agree with the lack of communication Amylin had with the shareholders. He sued the company and attempted to find a whole new board but decided to drop the lawsuit.
Bristol-Myers is saying the deal will hurt their earnings for the next two years by 3 cents per share. The total of debt and payment to Amylin’s old marketing partner, Eli Lilly & Co., makes the company worth about $7 billion.
Both companies have had their own share of successful products. Bristol-Myers has the well known treatments of Onglyza and Abilify. Where Amylin created the diabetes drug Byetta and more present Bydureon.