Biotech behemoth Amgen
The all-cash deals for both companies gives Amgen several mid-stage drug candidates to beef up its drug pipeline. Ilypsa's lead compound is set to start phase 3 trials as a treatment for a side effect of chronic kidney disease. Alantos' lead drug is a DPP-4 inhibitor used to treat diabetes. DPP-4 inhibitors are one of the hottest new therapies in treating diabetes since the approval of Merck's
Other major drugmakers like Bristol-Myers Squibb
At the rate that it's buying biotechs out, Amgen should have more than half the sector under its control by the end of the year. All jokes aside, Amgen has been a serial biotech acquirer in the past years, with deals like its $2 billion Abgenix buyout in 2005 and the monster $17 billion Immunex deal in 2001.
Since Ilypsa and Alantos were privately held, there's not a lot of public information about the companies floating about. Alantos' diabetes drug could very easily become a blockbuster depending on its efficacy and safety profile compared to the other DPP-4 inhibitors. But until the compounds from these deals are more mature in their developments, it's difficult to say whether Amgen is effectively using its capital with these acquisitions. As with other acquisitively-minded drugmakers, though, investors should closely follow the success or failure of the compounds from these deals to be sure that Amgen isn't squandering money that just as easily could be going to them via dividends.
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