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12:00 AM
Jul 09, 2012
 |  BioCentury  |  Strategy

Triple play in diabetes

How adding Amylin gives partners BMS, AstraZeneca leverage in diabetes

The addition of Amylin Pharmaceuticals Inc.'s glucagon-like peptide 1 franchise will give partners Bristol-Myers Squibb Co. and AstraZeneca plc three modern mechanisms in their commercial diabetes portfolio and five in the pipeline - more than any other players in the diabetes space.

Amylin's two GLP-1 products - once-weekly Bydureon exenatide and twice-daily Byetta exenatide - together are the second-ranked GLP-1s by sales behind Novo Nordisk A/S's Victoza liraglutide. But BMS and AZ believe they can boost sales of Bydureon by leveraging their much larger sales organizations, which have greater reach into primary care and emerging markets than Amylin would have been able to accomplish on its own.

The partners already sell Onglyza saxagliptin, a dipeptidyl peptidase-4 (DPP-4) inhibitor, and expect they will soon be adding Forxiga dapagliflozin, a sodium-glucose cotransporter 2 (SGLT2) inhibitor. Forxiga received a positive opinion from EMA's CHMP in April to treat Type II diabetes.

According to both BMS and AZ, the potential for combinations addressing all three mechanisms, plus combinations with generics like metformin, should give the partners a basket of products that can compete on a global scale.

The deal

The marketing strategy is being made possible by the June 29 deal for BMS to acquire Amylin for about $7 billion, including $5.3 billion for Amylin stock and $1.7 billion to pay off the biotech's debt and a contractual obligation to former partner Eli Lilly and Co.

For Amylin shareholders, the $31 per share acquisition price is more than double the biotech's stock price of $15.39 on March 27, the day before media reports of a rumored bid from BMS (see "Iconic Patience," A17).

Following the acquisition, Amylin's diabetes portfolio will be folded into BMS's existing diabetes alliance with AZ. In return, AstraZeneca will make a $3.4 billion cash payment to BMS's Amylin subsidiary.

AstraZeneca also has an option to make an additional payment of $135 million to BMS to gain equal governance rights over strategic and financial decisions related to undisclosed parts of the collaboration.

Under their original 2007 diabetes deal, the pharma partners will equally share costs and profits. Onglyza and Forxiga are the two products currently included in the collaboration.

According to Elliott Sigal, EVP, CSO and president of R&D at BMS, the Amylin deal signals an expansion in the deal beyond co-development and co-commercialization. "Now you see the evolution of the alliance in doing business development together," he told BioCentury.

Shaun Grady, AZ's VP and head of strategic partnering and business development (SPBD) group, told BioCentury the deal moved very quickly, thanks largely to the existing collaboration.

Grady said BMS and AZ started discussing the potential to acquire Amylin in May.

"What really helped was that we had the existing collaboration and we agreed that we could drop the Amylin portfolio into the existing collaboration. That meant we could spend all our efforts and time evaluating Bydureon, Byetta and Symlin and the opportunities they presented, rather than spend all our time renegotiating the contract," he said.

Additionally, according to Grady, each pharma already had independently concluded the alliance needed to add a GLP-1 to the portfolio, and acquiring Amylin was the way to do it.

"What has been very clear over the past few years is the importance of GLP-1s," said Martin...

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