Following positive phase 3 clinical trials for late-stage colorectal cancer therapies, biotech giant Amgen
In a deal valued at $2.2 billion, the world's second-largest biotechnology company, behind Genentech
When marketed, panitumumab will compete against Erbitux, a monoclonal antibody developed by ImCloneSystems
Amgen sees the deal reducing earnings $0.05 to $0.10 a share for the next year or so, but the company also said that it sees panitumumab generating sales of $2 billion once it's launched. If that's the case, then Amgen is getting Abgenix for the price of panitumumab alone and acquires the rest of the company essentially for free. That's nice, since the bone loss drug denosumab has blockbuster potential in the huge osteoporosis market.
Abgenix is best known for its therapeutic antibodies -- in particular, its XenoMouse technology that allows for the creation of fully human proteins in its genetically engineered mice. As a result, a number of other antibody research companies got a boost from the deal in the hopes that they, too, would be bought out. Motley Fool Rule Breakers selection Protein Design Labs
The Amgen-Abgenix deal could mark the beginning of a new phase of drug development. Rather than paying out royalties to their partners, the biotechs would instead swallow them and keep all of the revenues in house. It would seem that those research- and development-stage companies best positioned for such an acquisition would be those with a deep pipeline of promising new drugs.
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