Amgen’s cancer deal
Amgen (NASDAQ:AMGN) made headlines on Monday morning when it was announced the long awaited deal with Onyx Pharmaceuticals finally closed. An approaching patent cliff has pushed the company to look for large deals within the pharma space. Onyx has agreed to sell for roughly $10.4 billion in cash, making the deal one of the largest biotechnology deals in history. The deal had long been rumored as it would enable Amgen to get some skin in the cancer game. Up until this point the company has missed the cancer game. Amgen will gain access to the company’s three anticancer treatments.
Onyx, based out of California, has focused its attention on developing a potentially blockbuster myeloma drug. Kyprolis, which was approved in the United States last July as a last-ditch treatment for multiple myeloma, a bone marrow cancer. In the first six months the drug generated $125 million in revenues. However, many analysts see annual sales growing to $2 billion if the drug wins approval in Europe, and wins approval to be used earlier in the course of treatment. Amgen will be looking to leverage its background in approval and distribution to grow revenues. The company’s Chief Executive Robert Bradway believes “Amgen has a unique opportunity to add value to Kyprolis, a product which is at an early and promising stage of its launch,”.
Shares of Onyx traded higher by 5.75% on Monday morning to $123.68 following the announcement. When the deal closes later in the year shareholders should receive $125 per share in compensation. Apparently the deal was received well on the other side as well. Shares of were higher by more than 5% early in the session as the street weighted the news. Year to date shares of the company are higher by more than 25%, in line with the broad biotechnology sector.
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