Amylin Purchase Makes Sense for AstraZeneca

This latest acquisition will help Astra and Bristol-Myers cope with their patent cliffs

Damien Conover, CFA 3 July, 2012 | 10:11AM
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Bristol-Myers (BMY) in collaboration with AstraZeneca (AZN) announced the acquisition of Amylin (AMLN) for $31 per share in an all-cash deal. Amylin's board of directors unanimously recommended that shareholders tender their shares. We don't see any major hurdles to the deal closing or any new bidders coming into the process.

For Bristol and Astra, even though the purchase price was $1.5 billion higher than our valuation for Amylin under the best-case scenario, we don't expect any major changes to our fair value estimates for either Big Pharma firm. In our view, the rich price tag was diluted by the companies splitting the purchase and the likely cost synergies that should materialise as the larger companies optimise sales and marketing costs.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AstraZeneca PLC8,845.00 GBX2.04Rating

About Author

Damien Conover, CFA  is an equity analyst and associate director at Morningstar.

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