The Medicines Company, Bristol-Myers Squibb Announce Global Alliance for Recothrom
The Medicines Company (NASDAQ: MDCO) and Bristol-Myers Squibb Company (NYSE: BMY) announced today that the companies have signed a global license and two year collaboration for Recothrom(R), a recombinant thrombin approved by the U.S. Food and Drug Administration for use as a topical hemostat to control non-arterial bleeding during surgical procedures.
Recothrom net revenues in 2011 were $65 million. The product is currently commercially available in the United States and Canada. The intellectual property license agreement is global and The Medicines Company anticipates pursuing approvals in additional countries. The transaction is expected to be accretive to earnings per share (EPS) for The Medicines Company in 2013. Under terms of the agreement, The Medicines Company will pay Bristol-Myers Squibb an upfront collaboration payment of $105 million and an upfront option fee of $10 million. The Medicines Company has also agreed to pay Bristol-Myers Squibb a tiered royalty on annual net revenues of Recothrom during the two-year collaboration term. Bristol-Myers Squibb will retain responsibility for the manufacturing of Recothrom and will be The Medicine Company's exclusive supplier of Recothrom during the term of the agreement. The option enables The Medicines Company to acquire the Recothrom assets for a purchase price based on average net sales during the two-year collaboration term.
The transaction is expected to be minimally accretive to EPS for Bristol-Myers Squibb in 2013 and 2014. The transaction is subject to the satisfaction or waiver of closing conditions, including the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the delivery by Bristol-Myers Squibb of certain audited financial information relating to the business.
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