AstraZeneca's $4.1 billion purchase of Bristol Myers Squibb diabetes business

December 23, 2013 source: AstraZeneca, the pharmaceutical giant of the daily economic news, announced on Thursday that it would acquire the diabetes medicine business jointly developed with BMS at a price of up to $4.1 billion AstraZeneca will first pay $2.7 billion, plus up to $1.4 billion in regulatory, start-up and sales related payments, according to the global official website As part of the agreement, AstraZeneca will pay Bristol Myers Squibb a specific amount of royalties by 2025 The agreement is subject to regulatory approval before it will take effect and the transaction is expected to be completed in January 2014 It is understood that AstraZeneca and Bristol Myers Squibb reached an alliance partnership in January 2007, aiming to jointly develop drugs for the treatment of type 2 diabetes Since then, the cooperation between the two countries has expanded In August 2012, the two sides jointly invested 5.3 billion US dollars to acquire amylin pharmaceutical company The partnership then widened to include other diabetes related products A person close to AstraZeneca told the daily economic news that the main reason why AstraZeneca ended its alliance with Squibb and took over the whole business is that the cooperation between the two sides is not very good, and joint promotion has some disadvantages "For example, in terms of decision-making, any decision needs to be determined by both sides, which leads to a long time for decision-making." The person explained In addition to the above acquisition of Bristol Myers Squibb, AstraZeneca also announced that it would develop a $1.7 billion sales input plan in the area of diabetes to help increase sales of related products Pascal, CEO of AstraZeneca Pascal soriot has said that diabetes is rapidly becoming a global challenge in the field of epidemics and is expected to have an impact on the health of more than 550 million people by 2030 This impact will mainly occur in emerging markets where AstraZeneca has a greater advantage In this regard, many insiders pointed out that AstraZeneca's big investment in diabetes pharmaceutical business is a "big gamble" against the background of weak new drug development, and the company will face great performance pressure in the next few years "In recent years, AstraZeneca's performance in new drug research and development has been poor." "Many of AstraZeneca's patented drugs are about to expire, putting great pressure on the company's development," Shi lichen, a pharmaceutical partner of Beijing vertical and horizontal management consulting group, told the daily economic news In January this year, AstraZeneca released a performance forecast that the company's sales revenue will decline significantly this year due to the competition of low-cost generic drugs By the end of next year, AstraZeneca will end the patent protection period for several drugs, which account for about 40% of the company's total sales revenue This means that companies need to find new varieties to boost performance