Eli Lilly Receives $1.3 Billion Following Bristol-Myers Squibb's Acquisition of Amylin Pharmaceuticals
Eli Lilly has received $1.3 billion for payment of financial obligations from Amylin Pharmaceuticals following Bristol-Myers Squibb’s acquisition of Amylin Pharmaceuticals earlier this month.
Bristol-Myers Squibb acquired the biopharmaceutical company Amylin Pharmaceuticals for a purchase price of $5.3 billion and an additional $1.7 billion for assuming Amylin’s net debt and a contractual payment obligation to Eli Lilly based on Amylin’s recently terminated agreement with Eli Lilly over the diabetes drug exenatide. Following the closing of the acquisition of Amylin by Bristol-Myers Squibb, AstraZeneca made a $3.2-billion payment to Bristol-Myers Squibb as part of the companies’ previously formed diabetes-drug collaboration.
Amylin has paid to Lilly $1.259 billion in satisfaction of its revenue-sharing obligation with respect to exenatide. As a result, Lilly will recognize income in the third quarter of 2012 of approximately $790 million (pretax). Lilly also expects to recognize income in 2013 related to this payment of approximately $425 million (pretax) contingent upon transfer of exenatide commercial rights outside the United States to Amylin. Currently, Lilly anticipates these rights will be transferred to Amylin over the course of 2013. In addition, Amylin also has repaid in full to Lilly a $165 million loan and accrued interest.
Amylin and Eli Lilly had partnered for developing exenatide, the active ingredient in the diabetes drug Byetta, which was approved in the US in 2005, and for developing a once-a-week version of exenatide, Bydureon, which was approved in the European Union in June 2011 and in the US in January 2012. In November 2011, Amylin and Eli Lilly terminated their alliance for exenatide, with worldwide development and commercialization rights transitioning back to Amylin, starting with the US in 2011 and progressing to all markets by the end of 2013. As part of that termination, Amylin agreed to make a one-time, upfront payment to Eli Lilly of $250 million and pay future revenue-sharing payments to Eli Lilly based on global net sales of exenatide products.
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