Biotech M&A: BMY and AMLN Come Together at Last

Bristol-Myers Squibb (BMY) purchased diabetes drug-maker Amylin Pharmaceuticals (AMLN) for $5.3 billion on Friday. This is the 5th billion dollar pharmaceutical deal this year, and the largest. Bristol-Meyers complete another acquisition earlier this year. 

The deal should be a nice boost for Bristol, who faced initial generic competition for their $7 billion blood-thinning drug, Plavix, for the first time in May. 

AstraZeneca (AZN) is going to pay Bristol $3.4 billion to help pipeline the drug. 

Diabetes is a problem in the US, especially type 2, which is generally induced by the excess consumption of sugars. The disease is directly related to the obesity epidemic. About 346 million people worldwide are diabetics. 

Business Section: Investing Ideas 

By buying out Amylin, the desire to compete in the diabetes drug market will most likely become more intense. Other major pharmaceuticals like Pfizer (PFE) and Merck (MRK) could be looking to get in on this so far exclusive market. 

The market for new acquisitions by the major drug producers has slowed down recently, partially because there just aren’t too many companies producing drugs with a high potential to succeed.

Amylin Pharmaceutical POPS 8.9% with 4 Stocks Hitting 52-Week Highs

Amgen’s (NASDAQ:AMGN) license agreement with NPS Pharmaceuticals, Inc. (NASDAQ:NPSP) for royalties from sales of cinacalcet HCl (Sensipar/Mimpara), has been modified by NPS. Under terms of the revised agreement, NPS will receive a one-time $25 million payment in this current month in exchange for its rights to receive royalties under the license agreement that would accrete following December 31, 2018. The amendment also restricts the royalty offset of the royalty advance that NPS received from Amgen in August 2011, to $8 million per quarter with royalties in excess of $8 million paid to NPS for the respective quarter, thereby extending the period for royalty advance repayment. After the repayment of the royalty advance and a 9 percent per annum discount factor on the outstanding balance, Amgen will resume paying NPS all royalties accreted through December 31, 2018. As of June 30, NPS owed Amgen a remainder of $92 million on the royalty advance. Shares closed up 2 percent on the day at $74.37, having been traded between $47.66 and $73.75.