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Bristol-Myers Squibb Company Message Board

  • lindagriffin789 lindagriffin789 Aug 29, 2012 9:03 AM Flag

    Good buy AMLN

    The AMLN acquisition brought a lot of debts onto the balance sheet of BMY

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    • "The deal calls for Bristol-Myers to buy San Diego, Calif.-based Amylin for $31 a share. Including Amylin’s debt, the total value of the transaction is $7 billion. The shares will be acquired through a tender offer, following which the companies will undergo a second-step merger.
      The deal gives Bristol-Myers a robust pipeline of type-2 diabetes drugs, including Amylin's novel GLP-1 franchise that houses Byetta and Bydureon, which is the first ever once-weekly therapy for type 2 diabetes patients"

      "Under the terms of that deal, AstraZeneca will make a $3.4 billion cash payment to Amylin, which will be a wholly-owned subsidiary of Bristol-Myers. If AstraZeneca chooses to pay another $135 million, it will be able to establish equal governance rights over key strategic and financial decisions over Amylin"
      My opinion:
      The Astrazenca payment reduces the cost to BMY, which makes the new debt less than 1 yr of free cash flow for BMY. Total of all debt for BMY is less than 2 years of free cash flow which is still better than most of its peers.

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