Medicines, Bristol-Myers ink $115M deal for surgical hemostat

The Medicines Company and Bristol-Myers Squibb have signed a global license and two-year collaboration for Recothrom, a recombinant thrombin approved by the FDA for use as a topical hemostat to control non-arterial bleeding during surgical procedures.

Under terms of the agreement, Medicines will pay Bristol-Myers an upfront collaboration payment of $105 million and an upfront option fee of $10 million. Medicines also has agreed to pay Bristol-Myers a tiered royalty on annual net revenues of Recothrom during the two-year collaboration term. Bristol-Myers will retain responsibility for the manufacturing of Recothrom and will be Medicines' exclusive supplier of Recothrom during the term of the agreement. The option enables Medicines to acquire the Recothrom assets for a purchase price based on average net sales during the two-year collaboration term.

Recothrom, which is commercially available in the U.S. and Canada, had net revenues in 2011 of $65 million, Parsippany, N.J.-based Medicines reported. The intellectual property license agreement is global and Medicines anticipates pursuing approvals in additional countries.

The transaction is expected to be accretive to earnings per share (EPS) for Medicines in 2013. The transaction is expected to be minimally accretive to EPS for New York City-based Bristol-Myers 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 of certain audited financial information relating to the business.