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Amylin rumoured to have rejected $3.5bn offer from BMS

Leads to speculation of a bidding war for the California pharma company

Amylin shares have been moving skywards after it reportedly rejected a $3.5bn acquisition offer made last month by Bristol-Myers Squibb.

BMS' $22 a share offer was 43 per cent higher than Amylin's closing share price on Tuesday, the day before the Bloomberg report came out. The stock closed yesterday at $23.77, amid anticipation that a bidding war for the company may be on the cards.

Amylin focuses on drugs to treat diabetes and has been steadily building a lucrative business around its GLP1 analogue exenatide, initially launched as a twice-daily product called Byetta and latterly available in a once-weekly formulation known as Bydureon.

The company recently paid up to $1.6bn to extricate itself from a 10-year alliance with Eli Lilly for the marketing of the two exenatide products, prompting concerns that the product would suffer without the marketing and distributing muscle of a big pharma partner.

The company reported $517m in sales for Byetta last year, as well as preliminary (and unspecified) sales for Bydureon, which was approved in Europe last July and has been tipped as having the potential to bring the exenatide franchise value to $2bn or more at peak.

Neither Amylin nor BMS is commenting on the latest rumour, which has renewed speculation that other pharma companies - for example, AstraZeneca - may come forward with their own bids.

Analysts have suggested that AstraZeneca would be a better option for Amylin than BMS as it would be better placed to plug a marketing gap for exenatide outside the US, and particularly in Europe.

BMS and AstraZeneca have however been working together in the diabetes sector of late, collaborating on the development of already-marketed Onglyza (saxagliptin) for diabetes as well as a new compound, dapagliflozin, which has struggled to secure approval.

It would be logical for any deal involving Amylin to draw on the strengths of this existing collaboration in light of strong competition in the diabetes space from Lilly, Sanofi and Novo Nordisk.

Both BMS and AstraZeneca have been trying to bolster their pipelines through licensing and acquisition deals, in the face of patent expiries for top-selling brand as well as late-stage drug failures, and they have highlighted diabetes as a key area for expansion.

Last year for example, AstraZeneca entered into an option agreement to license diabetes drug candidates in development at Astellas subsidiary Prosidion, while BMS inked a deal with Ambrx for early-stage compound PEG-FGF-21.

29th March 2012

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