AstraZeneca could acquire Bristol-Myers Squibb's stake in diabetes JV: report

Citi analyst Andrew Baum suggested Friday that AstraZeneca could seek to increase its stake in the diabetes joint venture (JV) with Bristol-Myers Squibb following the latter's decision to exit diabetes research. Baum identified AstraZeneca as a likely buyer due to the companies' existing partnership and a need to find revenue streams as patents on key products expire. Baum estimated that Bristol-Myers Squibb's share of the non-US component of the JV could be worth between $4 billion and $6 billion.

Bristol-Myers Squibb announced on November 7 that it was refocusing its R&D efforts away from diabetes, as well as hepatitis C and neuroscience, towards immunologic therapies for cancer. Bristol-Myers Squibb's decision to exit diabetes research follows a series of setbacks in the JV, including the rejection of Forxiga (dapagliflozin) by the FDA in 2012, although the therapy was later cleared in Europe.

Therapies marketed by the JV include the injectable exenatide-containing diabetes drugs Byetta and Bydureon, Onglyza (saxagliptin) and Kombiglyze (saxagliptin/metformin). The drugmakers also expanded their diabetes alliance when Bristol-Myers Squibb acquired Amylin Pharmaceuticals in 2012.

"Given the competitive pricing dynamics within the diabetes market, we would see any such restructuring [by Bristol-Myers Squibb] as an incremental positive dependent on valuation and subsequent use of funds," said Baum. AstraZeneca declined to comment on the speculation.

For further analysis on the diabetes market please see Therapy Trends report: KOL Insight- Diabetes and Spotlight On: Diabetes marketing battle heats up as hostilities intensify.

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