AstraZeneca announced plans Thursday to acquire Bristol-Myers Squibb’s interests in a diabetes franchise the two firms established in 2007 – a move that continues the firm’s heavy investing in emerging treatments for diabetes.
Under the terms of the agreement, AstraZeneca will acquire the shares for an initial consideration of $2.7 billion on completion and up to $1.4 billion in regulatory, launch and sales related payments, according to Michele Meixell, AZ director of corporate communications. The firm also agreed to pay sales-related royalty payments up until 2025 and may make payments up to $225 million when certain assets are transferred.
The acquisition will consolidate global ownership of the diabetes business and is further evidence of AZ’s interest and commitment in discovering, developing and marketing medicines for diabetes – an ailment with a huge unmet medical need.
The companies anticipate that roughly 4,100 Bristol-Myers Squibb employees in the global diabetes business, including those at San Diego-based Amylin, eventually will transition to AZ. In the U.S., the total of employees from the franchise is about 2,000, none of whom will come to Delaware, and includes some already on AZ’s staff. BMS is headquartered in Princeton, N.J.
The franchise is based in Fort Washington, Pa., in a leased space that AZ will become solely responsible for upon completion of the deal, Meixell said.
Diabetes is a core area AZ has chosen as part of its strategy to return to growth as it works to overcome patent losses on major drug products.
It’s easy to see why.
Diabetes represents a $465 billion market. In Delaware alone, some 65,000 to 75,000 people are diagnosed with the disease.
It is a growing global epidemic projected to affect 550 million people worldwide by 2030, said Paul Hudson, president of AstraZeneca US, which has its offices for the Americas in Fairfax.
“This transaction reinforces AstraZeneca’s long-term commitment to help patients with a diverse, innovative portfolio of diabetes medicines,” said Hudson, also AstraZeneca’s executive vice president for North America. “We welcome Bristol-Myers Squibb staff who are due to join us, and look forward to growing in this critical therapy area.”