Bristol-Myers Squibb announced Friday night that it has agreed to buy San Diego-based Amylin Pharmaceuticals for $5.3 billion and then struck a secondary deal with AstraZeneca, whose regional headquarters is in Wilmington.
Bristol-Myers is based in New York, but the company has five New Jersey facilities.
Bristol-Myers won a bidding competition with several other pharmaceutical companies for Amylin, which has a couple key products in the diabetes category. Bristol-Myers will pay cash for Amylin, and then also assume Amylin debt and make a required payment to Eli Lilly and Co., Inc., which makes the total cost to be $7 billion.
Once Bristol-Myers completes the payment, Amylin will become a subsidiary.
Then AstraZeneca will pay $3.4 billion to Amylin for what is described as a "collaboration arrangement," which is "based on an existing diabetes alliance" between AstraZeneca and Bristol-Myers. Profits and losses will be shared equally, according to the statement issued jointly by Bristol-Myers and AstraZeneca.
AstraZeneca also has an option to take over governance rights to the collaboration if it pays Bristol-Myers an additional $135 million.
AstraZeneca has been searching for a new strategy in the last year after several research setbacks, thousands of layoffs and the departure of chief executive officer 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," Simon Lowth interim CEO of AstraZeneca, said in the joint statement.
"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.”