Bristol-Myers Squibb Company (NYSE:BMY) today announced that it has signed an agreement to sell its global diabetes business that was part of its collaboration with AstraZeneca. Under terms of the agreement, AstraZeneca will make an upfront payment of $2.7 billion to Bristol-Myers Squibb, with potential regulatory- and sales-based milestone payments of up to $1.4 billion and will make royalty payments based on net sales through 2025. In addition, AstraZeneca will make payments of up to $225 million if and when certain assets are subsequently transferred. The Bristol-Myers Squibb Board of Directors has approved this transaction.
The company also provided 2014 non-GAAP EPS guidance of $1.65 to $1.80. There is no readily accessible or reliable comparable GAAP measure for this non-GAAP EPS information at this time.
“This agreement will allow us to further evolve our business model as a leading specialty BioPharma company and increase resources behind the opportunities that drive the greatest long-term value for patients, our company and our shareholders,” said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb. “Today’s announcement puts the diabetes franchise in the capable hands of AstraZeneca and allows us to move to a more simplified operating model consistent with our pipeline and portfolio.”
Bristol-Myers Squibb and AstraZeneca entered into an alliance agreement in January 2007 to enable the companies to jointly research, develop and commercialize select investigational drugs for type 2 diabetes. The alliance has since been expanded to collaborate on additional diabetes products.Bristol-Myers Squibb will sell its global diabetes business that was part of its collaboration with AstraZeneca, which includes Onglyza (saxagliptin), Kombiglyze XR /Komboglyze (saxagliptin and metformin HCl extended release), dapagliflozin (marketed as Forxiga outside the U.S.), Byetta (exenatide), Bydureon (exenatide extended release for injectable suspension), Symlin (pramlintide acetate) and metreleptin. The agreement also includes the sale of the former Amylin manufacturing facility in West Chester, Ohio, and covers the future purchase by AstraZeneca of Bristol-Myers Squibb’s Mt. Vernon, Indiana, manufacturing facility approximately 18 months following the closing of the transaction. As part of the transaction, and subject to local consultation and legislation, Bristol-Myers Squibb and AstraZeneca anticipate that substantially all employees of Bristol-Myers Squibb dedicated to the diabetes business will be transferred to AstraZeneca. 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. Bristol-Myers Squibb will work closely with AstraZeneca to ensure a smooth transition.