July 2, 2012 / 2:23 PM / 5 years ago

TEXT-S&P comments on Bristol-Myers Squibb Co

July 2 - Standard & Poor's Ratings Services said today that Bristol-Myers Squibb Co.'s (A+/Stable/A-1+) $7.0 billion cash acquisition of unrated Amylin Pharmaceuticals will not affect its ratings or outlook on the company. On June 29, 2012, Bristol-Myers Squibb (BMS) and partner AstraZeneca PLC reached agreement to jointly purchase diabetes specialist Amylin. The $7.0 billion cost will be equally split between BMS and AstraZeneca, and both will share in the profits and cash flow from Amylin novel diabetes treatments. We view this transaction as a logical extension of the current BMS-AstraZeneca collaboration on diabetes. They shared in the development costs and now share in the promotion of Onglyza/Komglyze, members of the DPP-IV class of diabetes treatments. Another co-developed diabetes treatment, Forxiga, has been recommended for approval in Europe. U.S. approval has been delayed because of Food and Drug Administration concerns. Financially, the additional borrowings needed to fund BMS' share of the acquisition increase debt to EBITDA temporarily, but still within the range that we consider characteristic of a modest financial risk profile.

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