Bristol-Myers Squibb and AstraZeneca have entered into a partnership to buy diabetes drug maker Amylin Pharmaceuticals for $7bn.
Under the deal, B-MS will acquire the company and its diabetes drug Byetta (Exenatide) and Bydureon, the first ever once-weekly therapy for patients with type 2 diabetes, for $31.00 a share in cash, or $5.3bn.
It will also fork out another $1.7bn in debt to fulfil a contractual obligation to Eli Lilly, which was Amylin's former partner for the two drugs.
On completion of the transaction, which has been unanimously approved by the B-MS board of directors, AstraZeneca will pay $3.4bn for 50% of the profits from Amylin's drugs.
AstraZeneca, which already has a major diabetes partnership with B-MS covering Onglyza (Saxagliptin), Kombiglyze and Forxiga, also has the option of giving B-MS another $135m "to establish equal governance rights over financial decisions regarding the collaboration".
Amylin's primary focus is on the research, development and commercialisation of a franchise of GLP-1 agonists for the treatment of type 2 diabetes.
Lamberto Andreotti, B-MS CEO, said: "The acquisition of Amylin by Bristol-Myers Squibb is 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."
Simon Lowth, AstraZeneca CEO, added: "The broadening of our diabetes collaboration with Bristol-Myers Squibb is another important step towards creating a leadership position in the treatment of a disease with growing unmet medical need that is reaching epidemic proportions in many areas of the world.
"The combined development, regulatory and commercial strengths of the AstraZeneca and Bristol-Myers Squibb alliance for diabetes provides an excellent platform to unlock the potential of Amylin's differentiated treatments for the benefit of patients worldwide and for our shareholders."
Amylin's assets also include Metreleptin, currently under review by the US Food and Drug Administration (FDA) for the treatment of diabetes in patients with rare forms of inherited or acquired lipodystrophy, and the SYMLIN injection, approved by the FDA for the treatment of type 1 and type 2 diabetes in patients with inadequate glycemic control on meal-time insulin.
Image: AstraZeneca already has a major diabetes partnership with B-MS covering Onglyza, Kombiglyze and Forxiga. Photo courtesy of: FreeDigitialPhotos.net.