Amgen Purchases New Cancer Drug Through Onyx Pharmaceuticals
Written by Alyssa Clark
In an extremely expensive transaction this past weekend, Amgen agreed to buy Onyx Pharmaceuticals for an astounding $10.4 billion due to their groundbreaking discoveries in three anticancer treatments.
Breaking into the anticancer drug realm, Amgen (being one of the world’s largest biotechnology companies) has finally caught the fever in developing anticancer treatments and decided to get “in on the action” by acquiring Onyx’s latest research and products. The contract states that Amgen will offer $125 a share in cash with a tender offer for Onyx’s shares, and will close at the end of the fourth quarter.
This deal is the second largest in Amgen’s history behind the 2002 Immunex deal that occurred in 2002.
Constantly trying to keep product lines fresh and up-to-date with the most modern industry-affiliated drugs, the pharmaceutical industry has seen some infamous takeovers throughout its days as they try to remain on top of an ever-changing industry like the pharmaceutical one. Aside from the industry-known Sanofi-Aventis and Gilead Sciences takeovers in the past years, this take-over of Amgen’s will now rank within the Top 5 biggest takeovers of any pharmaceutical company, especially in biotechnology, according to the numbers recorded from the Standard & Poor’s Capital IQ.
The spike and consistent value of biotechnology stock has given biotech companies little or no desire to part with their stock, thus generating a gap within the market. With this constant desire for more and more takeovers throughout the industry, this deal was surprisingly slow in its cultivation and execution over the years.
“Amgen has a unique opportunity to add value to Kyprolis, a product which is at an early and promising stage of its launch,” Robert A. Bradway, chief executive of Amgen, based in Thousand Oaks, Calif., said in a statement Sunday.
The newly acquired Amgen drug, within its first 6 months of sales, had recorded sales of $125 million in just that short time-span alone. After winning approval from the necessary inter-industry officials, analysts project that the drug will continue to grow and sustain to an incredible $2 billion over the next several years if the drug begins being used earlier on in the treatment process.
These specific anticancer drugs named Kyprolis were designed to target multiple myeloma, a bone marrow cancer, and were approved in the United States last July. Another drug that Amgen already sells for cancer treatment is entitled Vectibix which treats colorectal cancer, but sales haven’t been up to the company’s expectation.
Industry competition is sure to be increased by the acquisition with the industry already being led by Celegene, and their blockbuster drug Revlimid. Another drug, by the same company, named Pomalyst will compete directly with Kyprolis thus generating even more competition within this already innately competitive industry. Another potential negative would be the cost: if Kyprolis is approved, it is likely that the drug will have to be used simultaneously with another anticancer drug like Celegene which will up patient and company costs.
However, Amgen maintains more than enough financial means to support its recent decision and the company stands firmly behind the recent takeover. Amgen is more than excited about the upcoming potential gain from this purchase, and is fully prepared with $8.1 billion in bank loans and $22 billion in cash for any bumps along their way to future successes.
About the Author
Alyssa Clark is the Editor of Healthcare Global