AstraZeneca to buy out Bristol diabetes venture

AstraZeneca is to buy out its joint venture with Bristol-Myers Squibb in a deal worth up to $4.3 billion, as it seeks to strengthen its limited range of innovative products and become a leading supplier of diabetes medicines.

The move to purchase Bristol-Myers' 50 per cent stake in the faltering venture centred on Amylin, a US biotech they jointly purchased for $7 billion last year, would give the Anglo- Swedish company full control of drugs worth about $1.65 billion in 2013 sales.

It follows the decision last month by Bristol-Myers Squibb to narrow its focus to specialist therapy areas including oncology and HIV.

Pascal Soriot, AstraZeneca's chief executive, said: "Diabetes is rapidly becoming a global challenge of epidemic proportions that is expected to affect more than 550m people by 2030 . . . It [the deal] reinforces AstraZeneca's long-term commitment to diabetes, a core strategic area for us and an important platform for returning AstraZeneca to growth."

AstraZeneca is seeking ways to offset a decline in revenues over the coming years driven by patent expiries, including its blockbuster statin Crestor.

AstraZeneca said 4,100 Bristol-Myers Squibb employees
would move to the company.

Buying the Bristol stake will boost AstraZeneca’s s sales and profits, even as Mr Soriot continues the long-term quest to improve the pipeline of promising experimental medicines. For Bristol, the deal means it will become an even more focused specialist drugmaker.

AstraZeneca said the acquisition, which it will finance from existing cash resources and short-term credit facilities, would be neutral to its core earnings in 2014. eculation on such a deal was fuelled last month after Bristol left diabetes drug research. – (Copyright The Financial Times Limited 2013)