AstraZeneca to buy Bristol-Myers Squibb’s stake in diabetes JV for up to $4.1B

AstraZeneca Plc, a global bio pharmaceutical company, has announced an agreement to acquire entire stake of Bristol-Myers Squibb Co (BMS) in their global diabetes joint venture for $4.1 billion.

Although a global deal, the move will also potentially boost the financials of AstraZeneca’s Indian public listed arm. India has an estimated 67-70 million confirmed diabetes patients with another 30 million odd in the pre-diabetes phase. The country is expected to house the largest number of diabetes patients in the world in a couple of decades.

BMS bought diabetes specialist Amylin Pharmaceuticals for $5.3 billion last year and formed an alliance with AstraZeneca. The BMS-AstraZeneca diabetes joint venture includes oral medicines Onglyza, Kombiglyze and Forxiga, as well as injectable treatments Bydureon and Byetta.

As per BMS’s India website, its diabetes products in the country include Onglyza. This it had been selling through its own operations and will move to AstraZeneca as per the global deal.

AstraZeneca will pay an initial amount of $2.7 billion on completion and up to $1.4 billion in regulatory, launch and sales-related payments. AstraZeneca has also agreed to pay various sales related royalty payments up until 2015 and may also pay up to $225 million when certain assets are subsequently transferred. 

Once the transaction is completed, it will have intellectual property and global rights for the development, manufacture and commercialisation of the diabetes business, which includes drugs such as Onglyza, Kombiglyze XR, Komboglyze, Dapagliflozin, Byetta, Bydureon, Metreleptin and Symlin. 

"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," the company said in the filing. 

"In recent years, we have worked with our alliance partners at Bristol-Myers Squibb to develop an innovative portfolio of non-insulin anti-diabetic medicines that help address the needs of diabetic patients. Together with Bristol-Myers Squibb, the ownership of the diabetes portfolio would benefit both companies and allow us to better serve the needs of diabetic patients," said Pascal Soriot, CEO, AstraZeneca.

(Edited by Joby Puthuparampil Johnson)

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