Bristol-Myers Squibb Company
) recently announced the commencement of a cash tender offer to buy
the entire outstanding common stock of
Amylin Pharmaceuticals, Inc.
). The duration of the tender offer is until August 7, 2012, (5:00
PM New York time). However, the offer, whose closure is subject to
certain terms and conditions, can be extended.
AMYLIN PHARMA (AMLN): Free Stock Analysis
BRISTOL-MYERS (BMY): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis
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We remind investors that Bristol-Myers had announced its decision
to acquire Amylin for $31.00 per share or approximately $5.3
billion in cash on June 29, 2012. The offer price represented a
premium of 10% on Amylin's closing price on that date.
At the time of announcing the deal, Bristol-Myers stated that it
will assume Amylin's net debt and make a contractual payment to
Amylin's former partner,
Eli Lilly & Company
). The total value of the deal will extend to $7 billion in that
case. We remind investors that in November 2011, Amylin and Eli
Lilly had terminated their partnership for the worldwide
development and commercialization of exenatide.
We believe that Bristol-Myers' impending takeover of Amylin will
benefit both companies. We note that following the termination of
Amylin's exenatide agreement with Eli Lilly in November 2011,
Amylin has been considered to be a potential takeover candidate for
companies with a focus on diabetes. Amylin's exenatide franchise
consists of Byetta and Bydureon (once-weekly exenatide).
While Byetta sales have been lagging expectations, Bydureon, which
was launched earlier this year in the US, could very well be a
blockbuster. Moreover, the deal is financially rewarding for
Amylin's stockholders, who have been advised by its board of
directors to tender their shares. Amylin's shares shot up
significantly from the time acquisition rumors started doing the
rounds in March 2012.
The Amylin acquisition is a smart strategic move by Bristol-Myers
since it already has a presence in the diabetes market (Onglyza and
Kombiglyze). Moreover, the loss of exclusivity of its blockbuster
blood-thinner Plavix on May 17, 2012 in the US is likely to result
in substantial revenue losses for Bristol-Myers. The Amylin buy,
through which Bristol-Myers aims to expand its presence in the
lucrative diabetes market, is an effort to combat the substantial
revenue losses due to Plavix's genericization in the US.
The announcement of the Amylin deal is the second major deal for
Bristol-Myers this year. In February 2012, Bristol-Myers purchased
Inhibitex, Inc., for $2.5 billion targeting the lucrative HCV
Neutral on Bristol-Myers, Amylin
We currently have a Neutral recommendation on Bristol-Myers. The
stock carries a Zacks #3 Rank (Hold rating) in the short run. Our
stance is similar on Amylin.