5. Buyer: AstraZeneca
Target: Bristol-Myers Squibb diabetes partnership share
Price: $4.3 billion
When AstraZeneca ($AZN) and Bristol-Myers Squibb ($BMY) moved the marketing of their diabetes partnership into sequestered headquarters near Philadelphia last year, the idea was to think deep thoughts about how to sell diabetes. "We want them to have their own company, in a way--Diabetes Inc.," AstraZeneca CEO Pascal Soriot said at the time. Meanwhile, Bristol-Myers Squibb execs were thinking more about where to place the company's bets going forward, and it wasn't in diabetes.
So after 6 years as a couple, BMS decided last year to bail out of the relationship. AstraZeneca bought out its partner in a deal that EvaluatePharma says adds up to $4.325 billion. That put it midway down the list of top M&A deals last year.
That seems fine for Soriot, who still sees big upside in diabetes treatments and who got control of a much bigger operation that had beefed up significantly in the last couple of years. That is because in June of 2012, the two had engineered a deal in which BMS bought out diabetes specialist Amylin Pharmaceuticals for $5.3 billion--one of the bigger M&A deals of that year--and then AstraZeneca paid BMS $3.4 million as it was folded into the partnership.
With diabetes growing quickly worldwide, there is big upside potential but also lots of competition, including from longtime diabetes specialist Novo Nordisk ($NVO) and Sanofi ($SNY), which owns the best-selling diabetes drug in the world in long-acting Lantus. Merck ($MRK) is also a player with Januvia (sitagliptin). AstraZeneca knows about competition in the field. It booked a $1.7 billion charge last year against floundering sales of Bydureon, one of the Amylin drugs, and its Onglyza (saxagliptin), a DPP-4 inhibitor, has had pale sales compared to Januvia, which is in the same category.
Still, AstraZeneca is making some headway with Forxiga, its first-in-class Type 2 diabetes drug, which is a sodium glucose cotransporter-2 inhibitor (SGLT2 inhibitor) that works by pushing blood glucose out of the body via the kidneys. The drug was approved by the EU last year and by the FDA and Japan this year.
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-- Eric Palmer (email | Twitter)