The Medicines Company and Bristol-Myers Squibb agree to 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®, 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.

Clive Meanwell, M.D., Ph.D., Chairman and CEO of The Medicines Company said, “As a marketed, growing product to control blood loss in the hospital, we believe Recothrom is a strategic fit that enables operating leverage with The Medicines Company’s emerging perioperative care portfolio. The financial structures and net revenues fit well with our strategy for aggressive and sustainable growth in acute and intensive care medicine. Of course, thrombin is also a hemodynamic target we know well based on our experience with Angiomax® (bivalirudin), a thrombin inhibitor.”

“The Medicines Company’s expertise in advancing the treatment of critical care patients in hospital settings worldwide makes it the natural partner to bring Recothrom to patients and physicians,” said Giovanni Caforio, President, U.S. Pharmaceuticals of Bristol-Myers Squibb. “This agreement is part of Bristol-Myers Squibb’s ongoing efforts to simplify operations, improve our efficiency and better position ourselves to focus on our important work in areas of significant unmet medical need that are critical to our long-term success.”

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.

Leerink Swann LLC acted as exclusive financial advisor to The Medicines Company and WilmerHale acted as legal advisor to The Medicines Company. Covington & Burling LLP was legal advisor to Bristol-Myers Squibb.

About Recothrom®

Recothrom is a surgical hemostat that is applied topically to stop bleeding during surgery. Its active ingredient is recombinant human thrombin (“rThrombin”) and the product is indicated as an aid to hemostasis whenever control of bleeding by standard surgical techniques (such as suture, ligature, or cautery) is ineffective or impractical. Recothrom is part of a class of surgical hemostats commonly referred to as “active” hemostats. Other classes of surgical hemostats include mechanical hemostats, flowable hemostats and fibrin sealants. Recothrom was approved in the United States in January 2008 and in Canada in December 2010.