Bristol Meyers Squibb Finance Paper

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BRISTOL-MEYERS SQUIBB FINANCIAL ANALYSIS
A BRISTOL MEYERS SQUIBB AMYLIN MERGER ANALYSIS:
RICHARD LATIMER
UMUC FINANCE MAJOR

Executive Summary

On August 9th Bristol-Meyers Squibb successfully completed the tender offer for all of the outstanding shares of common stock of Amylin Pharmaceuticals Inc (NASDAQ: AMLN) at a purchase price of $31.00 per share.

As of the expiration of the offer on August 9th 140,550,153 shares of common stock of Amylin were validly tendered and not withdrawn in the tender offer. This according to a press release by Bristol-Meyers Squibb on August 9th . Bristol- Meyers Squibb exercised a right granted under the merger agreement with Amylin pursuant to which the tender offer was made to purchase additional shares from Amylin which would allow the biopharmaceutical giant to complete the merger without stockholder approval.

So why the consolidation in the biotech world and frankly why are there not more deals being done in the industry. Generic drugs play a huge role in why biotech companies do mergers. Once a drug company develops and brings to market a particular drug it has a certain amount of time to recoup R&D costs and turn a profit before generics are legally able to enter the market. Last year drugmakers lost patent protection on products valued at over $34 billion in annual sales. Looking over the horizon that number is expected to rise to $147 billion by 2015 according data compiled by Bloomberg.

The giants of the drug industry are looking for companies that have assets (potential drugs) that may fill the gap when patent protection is lost to generics. For Bristol-Meyers one of the more recent examples of this occurred as early as May of this year when its top seller Plavix a blood thinner faced generic competition for the first time. In 2011 Plavix was a $7.1 billion dollar boon to Bristol-Meyers. That is



Bibliography: Bristol-Meyers Squibb. (2012, September 16). Investors. Retrieved September 16, 2012, from BMS.com: http://www.bms.com/investors/Pages/home.aspx EHRHARDT, B. (2009). FINANCIAL MANAGEMENT. MASON OHIO: SOUTH WESTERN. Gitman/Zutter. (2012). Managerial Finance 13th Edition. pp. 1-632. Mergent Online. (n.d.). Company Financials. Retrieved September 16, 2012, from http://www.mergentonline.com.ezproxy.umuc.edu/companyfinancials.php?pagetype=standardized&compnumber=1138 RICK, F. (2005, JANUARY 1ST). THE DEDICATED TRADER. Retrieved SEPTEMBER 15TH, 2012, from COMPANY PROFILES: http://www.dedicatedtrader.com/DT/research/ratios_01.asp?Ticker=&Valuation=on&Financial=on&Growth=on&Turnover=on&Profit=on&Management=on&Efficiency=on&All=on&post=yes ROCKOFF, J. (2012, JUNE 30). BRISTOL WILL BUY DIABETES DRUG MAKER. Retrieved OCTOBER 5, 2012, from THE WALL STREET JOURNAL: http://online.wsj.com/article/SB10001424052702303649504577497543406581270.html TIRREL, S. P. (2012, JULY 3). BRISTOL AMYLIN DEAL HERALDS ACQUISITION MERGER. Retrieved SEPTEMBER 14TH, 2012, from BLOOMBERG.COM: http://www.businessweek.com/news/2012-06-29/bristol-myers-to-acquire-diabetes-maker-amylin-for-5-dot-3-billion Yukhananov, A. (2012, JANUARY 27). US FDA APPROVES AMYLINS DIABETES DRUG. Retrieved OCTOBER 5, 2012, from REUTERS: http://www.reuters.com/article/2012/01/27/us-fda-amylin-bydureon-idUSTRE80Q24Y20120127

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