Shares of Amylin Pharmaceuticals climbed before markets opened Monday, the first trading day after drugmaker Bristol-Myers Squibb Co. said it would buy the diabetes treatment developer.
Bristol-Myers said Friday it would spend $5.3 billion in cash to buy the San Diego company, or $31 per share.
Including Amylin's debt and a payment to Amylin's former marketing partner Eli Lilly & Co., the deal is worth about $7 billion.
Bristol-Myers will then enter into an alliance with Britain's AstraZeneca to develop and sell Amylin's diabetes drugs. AstraZeneca will pay Bristol-Myers $3.4 billion in cash, and the companies will share profits and losses.
Last fall, Amylin ended a long-standing collaboration with Eli Lilly to develop diabetes treatments, and it was seeking a partner to help with sales outside the United States. Its main products include the twice-a-day diabetes drug Byetta and a newer once-a-week version called Bydureon.
Bristol-Myers, of New York, and AstraZeneca, of London, were the two most logical buyers of the company, Bernstein analyst Dr. Tim Anderson said Monday.
Diabetes treatments are a key focus in the pharmaceutical sector as the population ages.
About 280 million people worldwide have diabetes, including 25.8 million in the U.S., according to the Centers for Disease Control and Prevention.
Anderson said the level of earnings accretion from Amylin will likely be modest for the acquiring companies and will probably not dramatically change the financial outlook for either Bristol-Myers or AstraZeneca.
Shares of Amylin Pharmaceuticals Inc. neared the deal price Monday, rising 9 percent, or $2.56, to $30.76 in pre-market trading. Bristol-Myers stock was flat, and U.S. traded shares of AstraZeneca rose 10 cents to $44.85.