Amgen Inc., one of the largest biotechnology firms in the world, has struck deal for over $1 billion to purchase Rockville, MD-based biotechnology firm Micromet. For $11 a share, Amgen will add Micromet pharmaceuticals such as blinatumomab, a leukemia drug in Phase 2 trials, to its repertoire of oncology treatments.
Blinatumomab is presently being tested for effectiveness at curbing non-Hodgkin’s lymphoma and lymphoblastic leukemia. June 2011 trials found 9 out of 12 patients on the drug went into full remission from acute lymphoblastic leukemia.
If approved by the US Food and Drug Administration (FDA), blinatumomab could touch many lives, as the disease currently affects around 5,750 Americans annually.
Amgen has already seen success in the cancer market, with higher-than-predicted sales of Xgeva, an FDA-approved medicine reducing fractures in cancer patients. Further, in the closing months of 2011, drugs Neulasta and Neupogen, which lower the risk of infection in chemotherapy patients, rose by 7% to over $1.3 billion in sales.
Incoming company CEO Robert Bradway says cancer medicine sales, along with greater regulatory approval, would stimulate revenue growth in 2012. Sales brought in by Micromet would thus be a coup for Amgen.
Despite spending nearly $3 billion a year in research and development, in the last several years Amgen has produced few new marketable drugs to offset disappointing sales results, including those of anemia drugs Aranesp and Epogen.
With its innovation in oncology research and development, particularly the use of cytotoxic T-cells to kill tumours, Micromet was an obvious choice for Amgen’s most recent acquisition. The deal will have two phases, with the major share purchase carried out by an Amgen subsidiary, and Amgen itself buying the remainder of the shares.
Capital IQ data reveals that this is Amgen’s most significant acquisition since it purchased BioVex, another experimental cancer drug company, for $425 million in 2010.
Deal-Making Widespread in Biotechnology Industry
Amgen is not the only large company taking over a smaller company in the biopharmaceutical industry. The same week it announced its deal with Micromet, Roche Holding announced a bid of nearly $6 billion for Illumia, a genetic analysis service.
Further, multinational biopharma company Celgene made an offer of $350 million in cash up front to Avila Therapeutics, a private biotechnology company, possibly adding another $225 million provided its requirements were satisfied.
In the last five years there have been over 260 takeovers in the US within the biotechnology industry, according to Bloomberg data.
Key Statistics – Global Biotechnology Market (source: MarketLine)
- The global biotechnology market is expected to be worth over $398 billion in 2015, the culmination of a five-year increase of nearly 60%.
- In 2010, the global biotechnology market reached a nearly $250 billion value, an increase of around 8%.
- The global biotechnology market’s most significant segment is medical/healthcare, with over 67% of market share.
- Over 46% of global biotechnology market value is from the Americas.