Biopharmaceutical company Bristol-Myers Squibb Co. (BMY: Quote) has agreed to acquire diabetes drug maker Amylin Pharmaceuticals, Inc. (AMLN: Quote) for $31 per share in cash for a purchase price of about $5.3 billion, the two companies said Friday.
Including Amylin's net debt and a contractual payment obligation to Eli Lilly & Co. (LLY: Quote) that together total about $1.7 billion, the total value of the transaction is about $7 billion. The offer price represents a nearly 10 percent premium to Amylin's closing stock price on Friday of $28.20.
Bristol-Myers noted that the acquisition adds to its portfolio Amylin's approved and marketed products for Type 2 diabetes, including Byette and Bydureon.
The company said it will expand its diabetes alliance with AstraZeneca plc (AZN: Quote,AZN.L) through the acquisition. AstraZeneca will make a $3.4 billion cash payment to Amylin, following completion of its acquisition by Bristol-Myers Squibb.
The deal comes just months after Amylin reportedly rejected a $3.5 billion unsolicited takeover offer from Bristol-Myers. Following Amylin's rejection of the offer, activist investor Carl Icahn had filed a lawsuit against Amylin to put pressure on it to pursue a deal for a sale of the company. Icahn owns about 9 percent of Amylin's shares.
The acquisition, which will be completed through a cash tender offer and second step merger, has been unanimously approved by the boards of directors of both companies. Amylin's board has unanimously recommended that its stockholders accept the tender offer. The companies expect the tender offer to close about thirty days after its commencement.
The merger agreement contains a provision under which Amylin has agreed not to solicit any competing offers for the company. Bristol-Myers will finance the acquisition from its existing cash resources and credit facilities.
Amylin was focused on finding a marketing partner for its diabetes products outside the U.S. and was in talks with several drug companies after it terminated a decade-long alliance with Eli Lilly in November.
In January, Amylin had received FDA approval for Bydureon, a once-weekly formulation of the earlier diabetes drug Byetta. Bydureon is a once-weekly version of the injectable diabetes medication Byetta. Byetta was the first glucagon-like peptide-1 receptor agonist to be approved by the FDA for the treatment of type 2 diabetes.
Bristol-Myers and AstraZeneca said that once the buyout is completed, the companies will enter into collaboration arrangements for the development and commercialization of Amylin's portfolio of products. This will be based on the framework of their existing diabetes alliance.
Bristol-Myers and AstraZeneca entered into a collaboration in January 2007 to enable the companies to research, develop and commercialize select investigational drugs for type 2 diabetes.
Bristol-Myers expects the transactions to be dilutive to its adjusted earnings per share in 2012 and 2013 by about $0.03, becoming slightly accretive from 2014 with meaningful accretion expected in the later part of the decade.
BMY closed Friday's trading at $35.95, up $0.87 or 2.48 percent on a volume of 11.19 million shares. AMLN closed trading at $28.20, up $0.17 or 0.61 percent on 2.08 million shares.
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by RTT Staff Writer
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