With its secondary hyperparathyroidism treatment, Sensipar, set to face generic competition in a few years, Amgen
Amgen is paying $315 million for KAI Pharmaceuticals -- entirely, it seems, for KAI-4169, which has completed phase 2 development. KAI had a partnership with Bristol-Myers Squibb
Amgen wants to push KAI-4169 into phase 3 trials quickly, so it's lending KAI some money so the company can press on with trial planning before the deal closes. The fact that KAI needs a loan probably signals that it was a little desperate for a sale and that Amgen probably got a good deal.
There's no doubt the KAI acquisition is a good fit. There's the obvious experience in selling Sensipar, which brought in more than $800 million last year. But secondary hyperparathyroidism is a hormone imbalance that is often caused by kidney failure, so it fits well with Amgen's anemia drugs.
Follow-on compounds often struggle after the first-generation drug goes generic -- think Pfizer's
The true sales potential for KAI-4169 will ultimately depend on the phase 3 efficacy data, so it'll be a while before we know whether the KAI acquisition was a good buy. But for now, it looks like a good move to combat the inevitable loss of Sensipar.
Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Pfizer and Johnson & Johnson and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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