Amgen struck a deal to buy cancer drug maker Onyx Pharmaceuticals for about US$10.4 billion, as it moves to restock its product pipeline in response to declining sales of its flagship anaemia drugs.
The acquisition - which ends a two-month-long auction of Onyx - represents the fifth-largest biotechnology deal in history. It gives Amgen full rights to Kyprolis, the new multiple myeloma drug that analysts expect to reach annual peak sales in excess of US$2 billion.
The world’s largest biotechnology company will also gain a revenue stream from the liver and kidney cancer drug Nexavar that Onyx shares with Bayer, as well as royalty payments on Bayer’s much newer colon cancer drug, Stivarga, and potential future royalties on an experimental breast cancer drug being developed by Pfizer.
Amgen has faced growing pressure to beef up its drug development pipeline as safety concerns have trimmed sales of its flagship anaemia drugs, Aranesp and Epogen. Also, patents on four of its five top-selling drugs are set to expire starting in 2015.
Cancer medicines are the holy grail for many drugmakers because current products have limited effectiveness and the companies can charge steep prices for new biotech treatments.
Amgen said it will pay US$125 per share for Onyx, a 4.2 per cent increase from the US$120 a share it offered in June. Onyx said that bid significantly undervalued the company and put itself up for sale.