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Eli Lilly and Co. plans to sell its drug to treat low blood sugar to California-based Amphastar Pharmaceuticals in a deal that could be worth up to $1.1 billion.
The two companies said they have entered into a definitive agreement for Lilly to divest the drug, called Baqsimi, which is a nasal spray for diabetics at risk for very low blood sugar.
Amphastar, based in Rancho Cucamonga, California, is a publicly traded specialty pharmaceutical company that develops, manufactures and sells inhalation and intranasal products.
The two companies said the deal will expand the availability of Baqsimi to patients, with Amphastar providing an undisclosed amount of “dedicated commercial investment” for the drug.
Worldwide sales of Baqsimi totaled $139.3 million last year, representing less than 1% of Indianapolis-based Lilly’s worldwide revenue of $28.5 billion.
The move comes after Lilly cut prices on a range of older insulins by 70% and is ramping up to manufacture more of its newest Type 2 diabetes drug called Mounjaro, which is in huge demand.
The Food and Drug Administration approved Baqsimi in 2019 to treat severe hypoglycemia, or low blood sugar, in adults and children over four. The treatment comes in a compact, portable and ready-to-use dose. Lilly said the drug is an option to “quickly render aid in rescue situations.”
The deal is expected to close in the second or third quarter of this year.
The deal calls for Amphastar to pay Lilly $500 million in cash at the closing and an additional $125 million in cash upon the one-year anniversary of the closing. Lilly is also eligible to receive sales-based milestone payments of up to $450 million in total.
Lilly shares were down $3.38, or less than 1%, in early-afternoon trading, to $381.86 each.
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