A pharmacist counts pills in a pharmacy. File image: Reuters

Pharmaceutical giant Bristol-Myers Squibb announced late Friday that it will purchase diabetes drug maker Amylin Pharmaceuticals, Inc. for about $7 billion.

Under the deal, unanimously approved by the boards of directors of both companies, Bristol-Myers Squibb will pay $31 in cash per Amylin share and assume Amylin's debt and a contractual payment obligation totalling about $1.7 billion, the announcement said.

The overall coast of the acquisition will be approximately $7 billion, it said.

In addition, Bristol-Myers Squibb and another pharmaceutical company, AstraZeneca, announced that, following the completion of Bristol-Myers Squibb's acquisition of Amylin, the companies will enter into collaboration arrangements regarding the development and commercialisation of Amylin's portfolio of products.

As part of this plan, AstraZeneca will make a payment to Amylin, as a wholly owned subsidiary of Bristol-Myers Squibb, in the amount of approximately $3.4 billion in cash.

Profits and losses arising from the collaboration will be shared equally.

AstraZeneca will have the option to establish equal governance rights over key strategic and financial decisions regarding the collaboration, upon the payment to Bristol-Myers Squibb of an additional $135 million.

“Amylin's innovative diabetes portfolio, talented people and state-of-the art manufacturing facility complement our long-standing leadership in metabolics,” Lamberto Andreotti, chief executive officer of Bristol-Myers Squibb said in a statement.

“We are pleased to be able to strengthen the portfolio we have built to help patients with diabetes by building on the success Amylin has had with its GLP-1 franchise.”

Simon Lowth, interim chief executive officer of AstraZeneca, said that broadening diabetes collaboration with Bristol-Myers Squibb “is another important step towards creating a leadership position in the treatment of a disease with growing unmet medical need that is reaching epidemic proportions in many areas of the world.” - Sapa-AFP