Amylin Pharmaceuticals Inc. has lured suitors such as Pfizer Inc., AstraZeneca Plc and Sanofi, which signed confidentiality agreements on the drugmaker’s sale process, said people familiar with the matter.
Merck & Co., Takeda Pharmaceutical Co., Roche Holding AG and Bristol-Myers Squibb Co. also signed agreements to get access to confidential financial and product information for Amylin, said the people, who declined to be identified as talks are private. The drug developer is seeking a buyer following its rejection of an unsolicited offer from Bristol-Myers, people with knowledge of the matter said earlier this year.
First-round bids are due in the next two weeks, said two of the people. Amylin, the maker of the diabetes drugs Bydureon and Byetta, has a market capitalization of more than $4 billion and generated more than $650 million in revenue last year.
“Diabetes is an area companies either want a position in or want a stronger position in,” said Mark Clark, an analyst at Deutsche Bank in London. “Amylin is not a massive financial stretch so it comes down to what companies’ alternatives are, whether there are other synergies involved and who it makes the most sense to. Some companies are more desperate for revenue sources than others.”
Clark recommends buying Sanofi shares and has a “hold” rating on AstraZeneca.
San Diego-based Amylin hired Credit Suisse Group AG and Goldman Sachs Group Inc. to assess takeover interest, one person said last month. Representatives at Amylin, Takeda, Merck, AstraZeneca, Sanofi, Bristol-Myers, Roche and Pfizer declined to comment.
Amylin gained 6.4 percent to $27.30 at 4 p.m. New York time, the shares’ highest value since August 2008. They have gained 15 percent since March 28, when Bloomberg reported Amylin’s rejection of the Bristol-Myers bid. Amylin spurned an offer of $22 a share from New York-based Bristol-Myers in February, people with knowledge of the bid said in March.
Billionaire investor Carl Icahn dropped a lawsuit against the company last month following a meeting with Chief Executive Officer Daniel Bradbury. Icahn owned about 8.8 percent of Amylin as of April, according to data compiled by Bloomberg. He had sued Amylin in Delaware Chancery Court over a rule requiring advance notice of candidates for board seats after the board rejected Bristol-Myers’s $3.5 billion buyout bid. Icahn has said he still wants Amylin to pursue a sale.
Amylin received regulatory approval for Bydureon, a once-weekly formulation of its earlier diabetes drug Byetta, in January, and the therapy may draw $1.5 billion in peak annual sales in the U.S., according to Robyn Karnauskas, an analyst with Deutsche Bank. The drugmaker had been seeking a partner to help market Bydureon outside the U.S. since November, when it ended a collaboration with Eli Lilly & Co.
Sanofi, based in Paris, and Merck, in Whitehouse Station, New Jersey, would gain the most strategically from purchasing Amylin, Leerink Swann analysts Seamus Fernandez and Steve Yoo wrote in a research note today. They estimate a price of more than $30 a share “for the right acquirer.”
“We would see Amylin bringing several key strategic positives as well as substantial operational synergies for Sanofi,” the analysts wrote, naming a prescribing change that includes dosing of Byetta with Sanofi’s Lantus, immediate access to the GLP-1 class of diabetes drugs and overlaps in research and development.
Merck, the analysts wrote, “has a deep commitment to diabetes” and is facing competition from Bristol-Myers, AstraZeneca and Takeda.
Sanofi started looking at Amylin last year, after the U.S. company said it had ended the partnership with Eli Lilly, one person said.
Sanofi internally has discussed the rationale of a bid, given that Byetta would compete with its own experimental version of a similar drug, known as lixisenatide, one person said. The French company, which has been gathering information on Amylin, also has some doubts as to the potential of Bydureon, this person said.
Still, Sanofi is keen on Amylin because Byetta is a successful product that would give it access to a so-called GLP-1 treatment well before lixisenatide comes to market, another person said.
“Sanofi has been very explicit that they want a full range of products and services for diabetes,” Clark said.
Roche, based in Basel, Switzerland, tried to expand in the GLP-1 market once before, with no luck. It returned rights to the experimental GLP-1 diabetes drug taspoglutide to developer Ipsen SA last year, after patients dropped out of trials because of side effects.
Bristol-Myers and London’s AstraZeneca failed to win U.S. clearance earlier this year to sell the experimental diabetes treatment dapagliflozin as regulators sought more safety data.
“Any of the companies listed would fit the characteristics of having a ‘strong’ R&D commitment to diabetes,” the Leerink Swann analysts wrote. “Amylin could be deemed highly strategic for any of the companies cited.”