BMY

Business Context and Reporting Period

This Form 8-K, filed on July 2, 2012, reports on events occurring on June 29, 2012. Bristol-Myers Squibb Company (BMS) entered into a definitive Agreement and Plan of Merger to acquire Amylin Pharmaceuticals, Inc. (Amylin). The transaction involves a tender offer followed by a merger, with Amylin becoming a wholly-owned subsidiary of BMS.

Key Financial Metrics and Transaction Terms

• Offer Price: $31.00 per share in cash, net to the seller.
• Termination Fee: Amylin must pay BMS $160,000,000 under certain termination circumstances.
• Support Agreement: Key Amylin stockholders holding approximately 3% of shares (4,823,527 shares) have agreed to tender their shares.
• Collaboration Payment: Following the merger, AstraZeneca is expected to pay approximately $3.4 billion in cash to Amylin (as a BMS subsidiary) based on an existing diabetes alliance framework.
• Additional Governance Option: AstraZeneca may pay an additional $135 million to establish equal governance rights over the collaboration.
• Debt Assumption: BMS agreed to assume Amylin's obligations under a revenue sharing agreement and promissory note with Eli Lilly and Company.

Material Changes and Transaction Structure

The filing details a material change in corporate structure via a two-step acquisition process:

1. Tender Offer: BMS subsidiary (Merger Sub) will commence a tender offer within 7 business days of June 29, 2012, remaining open for at least 20 business days.
2. Merger: If Merger Sub holds 90% or more of outstanding shares post-offer, a "short-form" merger will occur without further stockholder approval. Otherwise, a special stockholders' meeting will be held.
3. Top-Up Option: BMS holds an irrevocable option to purchase additional shares to reach just over 90% ownership if the tender offer does not achieve that threshold.

The transaction is not subject to a financing condition but requires the expiration of the Hart-Scott-Rodino waiting period and the tender of a majority of shares (Minimum Condition).

Guidance, Risks, and Contingencies

Management Commentary and Outlook: The companies anticipate entering into collaboration arrangements with AstraZeneca regarding Amylin's product portfolio post-merger, with profits and losses shared equally.

Risks and Contingencies:

• Closing Uncertainty: There is no guarantee the acquisition will be completed or close within the anticipated timeframe.
• Regulatory Approval: The transaction is subject to antitrust review under the Hart-Scott-Rodino Act.
• Development Risks: Amylin's compounds are subject to inherent risks in the drug development process with no assurance of commercial success.
• Financial Impact: Actual financial impacts may differ from expectations described in the press release.

Unusual Items: The filing notes that BMS will assume specific liabilities related to a 2011 settlement with Eli Lilly and Company.

Investor Verification Checklist

• Verify the final tender offer statement (Schedule TO) and solicitation/recommendation statement (Schedule 14D-9) once filed with the SEC.
• Confirm the status of the Hart-Scott-Rodino antitrust waiting period.
• Review the terms of the Assumption Agreement regarding the Eli Lilly revenue sharing obligation.
• Monitor the percentage of shares tendered to determine if a short-form merger or special stockholder meeting is required.
• Assess the impact of the $3.4 billion AstraZeneca payment and the potential $135 million governance fee on future cash flows.