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Amgen drops $2.7bn to acquire stake in Chinese biotech in bid to expand in the region

Published on 01/11/19 at 11:28am

Amgen has signed an agreement with Chinese biotech BeiGene to acquire a 20.5% stake in the latter, in a bid to “significantly accelerate” the pharma firm’s plans to “expand its oncology presence in China, the world's second-largest pharmaceutical market”, it has emerged.

Under the terms of the deal, Amgen will purchase the stake for $2.7 billion in cash, equivalent to $174.85 per share. In doing so, the pair have agreed that BeiGene will handle the commercialisation of three Amgen drugs in China: Xgeva (denosumab), Kyprolis (carfilzomib) and Blincyto (blinatumomab), sharing the profits and losses evenly.

After five years, one of these products will revert back to Amgen, followed by another after seven years. BeiGene is awarded the right to retain one product for an extra five years, while it will also receive royalties on Chinese sales for the products not retained.

Additionally, the deal will bring together the two partners to work on the development of 20 Amgen oncology drugs, pooling resources to contribute up to $1.25 billion in this pursuit.  

“This strategic collaboration with BeiGene will enable Amgen to serve significantly more patients by expanding our presence in the world's most populous country,” said Robert A Bradway, Amgen's Chairman and Chief Executive Officer. “Cancer is a leading cause of death in China and will only become a more pressing public health issue as the Chinese population ages. With its extensive commercial and clinical capabilities within China and a commitment to global quality standards, BeiGene is the ideal strategic collaborator as we seek to make a meaningful difference in the lives of millions of cancer patients in China and around the world.”

David W Meline, Amgen’s Executive Vice President and Chief Financial Officer at Amgen: "Amgen's capital allocation priorities remain unchanged. We will continue to grow our business through internal investment and business development, while providing attractive returns to our shareholders through a growing dividend and continued share repurchases."

With a focus on oncology, BeiGene boasts commercial and clinical development teams of 700 and 600 staff, respectively. Subject to approval from the shareholders at BeiGene, both companies expect the deal to close early next year.

Matt Fellows

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