Bristol-Myers Squibb (BMS) and AstraZeneca (AZ) have expanded their diabetes collaboration with the purchase of Amylin Pharmaceuticals in a novel deal worth a total of $7bn.
The agreement will initially see BMS pay $5.3bn to acquire US-based diabetes specialist Amylin and a further $1.7bn to pay off a debt owed by Amylin to Eli Lilly after the two companies ended their own diabetes partnership in November, 2011.
AZ (whose London HQ is pictured above) will then make a payment of about $3.4bn to BMS, giving it the rights to half of any profits made by Amylin in its new form as a subsidiary of BMS.
The deal, which follows a rumoured rejected solo bid of $3.5bn from BMS, expands the existing diabetes alliance between BMS and AZ which has so far focused on two drugs that work in different ways: Onglyza (saxagliptin), a DPP-4 inhibitor, and dapagliflozin, a SGLT2 inhibitor.
Onglyza is now available in both the US and EU, but dapagliflozin has struggled in the US, with the Food and Drug Administration (FDA) requesting more data following the drug's link to an increase in breast and bladder cancer.
This delay could mean the drug loses first-to-market advantage to Janssen's rival SGLT2 inhibitor canagliflozin, which was last month submitted to US and European regulators.
The Amylin deal gives BMS and AZ access to another approach in tackling type 2 diabetes in the form of GLP-1 agonist Byetta (exenatide injection) and its once-weekly version Bydureon.
Despite now facing competition from Novo Nordisk's Victoza (liraglutide), BMS and AZ have faith in the Byetta franchise's ability to complement their existing portfolio of diabetes products through a mechanism of action that involves imitating the GLP-1 protein to induce the secretion of insulin.
BMS and AZ will also gain the rights to Symline (pramlintide acetate) injection, an amylin analogue, approved by the FDA for the treatment of type 1 and type 2 diabetes patients with inadequate glycaemic control on meal-time insulin.
In addition, the companies will take control of metreleptin, currently under FDA review, as well Amylin's production facility in Ohio.
The deal is especially important for AZ, with a series of failed trial results giving the company one of big pharma's weakest pipelines and leading to the untimely departure of former CEO David Brennan.
“This is a compelling proposition that will have an immediate positive impact on revenues and is fully in line with our stated partnering strategy to enhance top-line growth and strengthen our late-stage pipeline,” said AZ's interim CEO Simon Lowth.
Lamberto Andreotti, CEO of BMS, highlighted how atypical the agreement is: “The acquisition of Amylin by Bristol-Myers Squibb is also a unique way for Bristol-Myers Squibb and AstraZeneca to expand the alliance between the two companies and it demonstrates Bristol-Myers Squibb's innovative and targeted approach to partnerships and business development.”