AstraZeneca to acquire Bristol-Myers Squibb share of global diabetes alliance assets

AstraZeneca has entered into an agreement under which it will acquire the entirety of Bristol-Myers Squibb’s interests in the companies’ diabetes alliance for an initial consideration of $2.7 billion on completion and up to $1.4 billion in regulatory, launch and sales-related payments. The company has also agreed to pay various sales-related royalty payments up until 2025. In addition, AstraZeneca may make payments up to $225 million when certain assets are subsequently transferred.

Upon completion of the transaction, AstraZeneca will own intellectual property and global rights for the development, manufacture and commercialization of the diabetes business, which includes Onglyza (saxagliptin), Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl), dapagliflozin (marketed as Forxiga outside the US), Byetta (exenatide), Bydureon (exenatide extended-release for injectable suspension), metreleptin and Symlin (pramlintide acetate).

The transaction will consolidate worldwide ownership of the diabetes business within AstraZeneca leveraging its primary and specialty care capabilities and its geographical reach, especially in emerging markets. The agreement reinforces AstraZeneca’s long-term commitment to patients with diabetes, a core strategic area and an important platform for returning AstraZeneca to growth.

Based on the anticipated timing of the close, the transaction will have no impact on AstraZeneca’s guidance for Core EPS for 2013. The company expects the transaction when implemented to be neutral to Core EPS in 2014. AstraZeneca reaffirms its commitment to its progressive dividend policy. AstraZeneca intends to finance the transaction from existing cash resources and short-term credit facilities.

AstraZeneca and Bristol-Myers Squibb anticipate that subject to local consultation and legislation, approximately 4,100 Bristol-Myers Squibb employees dedicated to the diabetes business, including those at Amylin, will eventually transition to AstraZeneca. Over time, AstraZeneca will also become responsible for the manufacturing and supply chain of the full portfolio of diabetes products. Bristol-Myers Squibb will continue to deliver specified clinical trials in line with the ongoing clinical trial plan. A number of R&D and manufacturing employees dedicated to diabetes will remain with Bristol-Myers Squibb to progress the diabetes portfolio and support the transition for these areas.