BMS, ASTRAZENECA COLLABORATING ON TWO DIABETES DRUGS

Bristol-Myers Squibb (BMS) and AstraZeneca announced that they are collaborating to develop and commercialize two experimental drugs for Type 2 diabetes.

Both drugs were discovered by BMS. AstraZeneca is paying the company $100 million up front as part of the agreement, and has agreed to fund the majority of development costs through 2009, after which any additional development costs will be shared equally. BMS may also receive additional payments of up to $650 million based on development and regulatory milestones for the two compounds.

The two drugs are saxagliptin, a dipeptidyl peptidase-4 inhibitor, and dapagliflozin, a sodium-glucose cotransporter-2 inhibitor. They are in Phase III and IIb clinical trials, respectively. The companies will jointly develop the clinical and marketing strategies of the compounds, and, after they are launched, will share commercialization expenses and profits or losses equally on a global basis, excluding Japan. BMS may also receive more money for potential sales milestones of up to $300 million per product.