Amgen to buy ChemoCentryx for $3.7 billion

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Amgen to buy ChemoCentryx for $3.7 billion

U.S. drugmaker Amgen IncAmgen Inc is buying ChemoCentryx Inc for $3.7 billion to get access to a potential blockbuster treatment for inflammatory disorders.

After AstraZeneca's 2020 acquisition of Alexion Pharmaceuticals for $39 billion, the buyout will give Amgen control of at least two experimental therapies for immune disorders.

Amgen has faced stiff competition for its top-selling arthritis drug, Enbrel, from newer branded rivals, and patents for the therapy are expected to expire in 2029.

The company said on Thursday it would pay $52 in cash for each share of ChemoCentryx, a premium of nearly 116%, to the target's last closing price. On the news, the shares of ChemoCentryx went up by just $1 shy of the offer price.

According to Joseph Schwartz, SVB Securities analyst Joseph Schwartz, said Amgen is a logical partner to take the torch from ChemoCentryx and launch Tavneos.

In the first full quarter of its launch, Tavneos brought in sales of $5.4 million, which was approved late last year to treat patients with rare form of blood vessel inflammation or vasculitis.

Vasculitis is caused by an over-activation of the immune system and can be fatal if not treated. The disease affects about 40,000 people in the United States, with about 4,000 new cases each year, according to ChemoCentryx.

Refinitiv data shows that the drug, which is being tested for other inflammatory conditions, is expected to generate more than $1 billion in sales by the year 2027, according to analysts.