Following positive phase 3 clinical trials for late-stage colorectal cancer therapies, biotech giant Amgen (NASDAQ:AMGN) apparently thought better of having to shell out 50% of the profits to its partner Abgenix (NASDAQ:ABGX) and, on Wednesday, decided to buy the company instead.

In a deal valued at $2.2 billion, the world's second-largest biotechnology company, behind Genentech (NYSE:DNA), will pay Abgenix stockholders $22.50 per share and assume the company's debt. The two companies had been collaborating on two cancer therapies, the colorectal cancer drug panitumumab, and the bone cancer and osteoporosis drug denosumab. It was the good news they received from the trials of panitumumab in November that tipped Amgen's hand in favor of a buyout.

When marketed, panitumumab will compete against Erbitux, a monoclonal antibody developed by ImCloneSystems (NASDAQ:IMCL) and marketed by Bristol-Myers Squibb (NYSE:BMY). Erbitux is also used to treat colorectal cancer in patients who have not responded to chemotherapy treatment. Amgen says panitumumab doesn't cause some of the severe allergic reactions in patients that are sometimes seen with Erbitux.

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 (NASDAQ:PDLI) jumped as much as 5.5% yesterday, while Medarex (NASDAQ:MEDX) closed up 13% on the news. PDL receives royalties from a number of companies for its therapeutic drugs, including Genentech, and Medarex is developing jointly with Bristol-Myers antibodies for the treatment of various cancers.

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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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. The Motley Fool has a disclosure policy.