Bristol-Myers Squibb Company (BMS) and AstraZeneca announced a collaboration to develop and commercialize two investigational compounds being studied for the treatment of type 2 diabetes. Both compounds were discovered by Bristol-Myers Squibb.

Saxagliptin, a dipeptidyl peptidase-4 (DPP-4) inhibitor, is currently in phase III development. Upon successful completion of the development programme, the companies plan to file for US regulatory approval of saxagliptin during the first half of 2008. Dapagliflozin (previously referred to as BMS-512148), a sodium-glucose cotransporter-2 (SGLT2) inhibitor, is currently in phase IIb development. The collaboration on these compounds is worldwide, except for Japan. Should either party develop additional DPP-4 or SGLT2 compounds, the other company can elect to add those compounds to the collaboration.

Terms of the agreements include an upfront payment of $100 million by AstraZeneca to Bristol-Myers Squibb. The companies have agreed upon initial development plans for the two compounds. From 2007 through 2009, the majority of development costs will be funded by AstraZeneca. Any additional development costs will be shared equally.

Bristol-Myers Squibb may also receive additional payments of up to $650 million based on development and regulatory milestones for the two compounds. In addition, potential sales milestones up to $300 million per product are also possible. The companies will jointly develop the clinical and marketing strategy of the compounds, and post-launch will share commercialization expenses and profits/losses equally on a global basis, excluding Japan. Bristol-Myers Squibb will manufacture both products and book sales.

"This collaboration provides Bristol-Myers Squibb the opportunity to maximize our primary care assets, and it is aligned with our corporate strategy to concentrate R&D efforts on serious diseases such as diabetes while maintaining commercial focus on specialists and high prescribing primary care physicians," said Jim Cornelius, chief executive officer, Bristol-Myers Squibb. "Bristol-Myers Squibb has a strong legacy in treating type 2 diabetes and cardiovascular disease, and we look forward to leveraging the combined expertise of our company and AstraZeneca to further develop and commercialize these compounds."

David Brennan, chief executive officer of AstraZeneca, said, "Diabetes is a disease reaching almost epidemic proportions in many regions throughout the world and is a particular area of scientific interest for AstraZeneca. This deal represents a significant step in delivering our externalization strategy as it gives us access to two strategically important late-stage compounds in an area of high unmet medical need. We believe that Bristol-Myers Squibb's recognized contributions to diabetes research will complement our existing strengths. Additionally, our combined expertise will develop new areas of opportunity for both companies and the potential to bring real medical benefit to the wider community."

Diabetes is a disease in which the body does not produce or properly use insulin. Insulin is a hormone needed to carry glucose (sugar) from the blood into cells, where it is converted to energy the cells need to perform properly. When insulin is not present or does not function correctly, the result is high levels of glucose in the blood. Over time, high blood glucose levels can lead to complications in the eyes, kidneys, central nervous system or heart.

Type 2 diabetes is the most common form of diabetes, accounting for approximately 90-95 per cent of diabetes cases. Having type 2 diabetes increases the risk of many serious complications, including heart disease or stroke, high blood pressure, amputation (particularly legs), blindness, nerve damage, and kidney failure. The risk of stroke and the rate of deaths due to heart disease are two to four times higher among people with diabetes, while about 65 per cent of deaths among people with diabetes are due to heart disease and stroke.

The American Diabetes Association (ADA) estimates that more than 20 million people in the United States, or 7 percent of the population, have diabetes, and that one in three Americans born in 2000 will develop diabetes sometime during their lifetime. There are currently more than 230 million people living with diabetes worldwide. The objective of treating diabetes is to control blood glucose to as normal a level as possible. This can be accomplished by a combination of diet, exercise and medication.

Saxagliptin is a dipeptidyl peptidase-4 (DPP-4) inhibitor, a new class of diabetes medicines that work by increasing and prolonging the action of natural hormones in the body called incretins. Incretins decrease blood sugar by increasing consumption of sugar by the body, mainly through increasing insulin production in the pancreas, and by reducing production of sugar by the liver. By enhancing the effect of active incretin hormones in the body, DPP-4 inhibitors improve timely insulin release and ultimately decrease high blood sugar levels in patients with type 2 diabetes.

Dapagliflozin is a sodium glucose cotransporter-2 (SGLT2) inhibitor. The SGLT2 transporter protein is located only in the kidney, where it normally reabsorbs glucose from urine while waste products are filtered out. Patients with type 2 diabetes continue to reabsorb glucose from the urine, even though this process contributes to high blood glucose levels, or hyperglycemia. Dapagliflozin has a novel mechanism of action that blocks re-absorption of glucose from urine in patients with type 2 diabetes. Inhibiting SGLT2 activity decreases re-absorption of glucose by the kidney, helping to improve glucose control in patients with type 2 diabetes.