Amgen to take 20.5% stake in Chinese biotech company BeiGene for $2.7bn

US biopharma company Amgen has signed an all-cash deal to acquire a 20.5% stake in Chinese biotech company BeiGene for about $2.7 billion, as per the latest pharma acquisition news.

The Beijing-based BeiGene is a research-based, oncology-focused biotechnology company, which is engaged in developing molecularly targeted and immuno-oncology drug candidates for cancer treatment.

The transaction is expected to significantly fast track Amgen’s plans to grow its oncology footprint in China, which is the second-largest pharmaceutical market in the world.

BeiGene is said to have a highly experienced team in China, which includes a 700-person commercial organization to go along with a 600-person clinical development organization.

Amgen to acquire 20.5% stake in BeiGene for $2.7bn. Photo courtesy of Coolcaesar/Wikipedia.org.

Apart from the stake acquisition, Amgen has entered into a collaboration with the Chinese biotech company.

As per the agreement, BeiGene will commercialize XGEVA (denosumab), KYPROLIS (carfilzomib), and BLINCYTO (blinatumomab) in China during which time the two pharma companies will share profits and losses on an equal basis. Two of these products will return to Amgen, one after five years and the other one after seven years.

After completion of the commercialization period, the Chinese biopharma company will hold the right to retain one of the products and will stand to receive royalties on sales in China for a further five years on the products that are not retained.

XGEVA was launched in China in September 2019, while KYPROLIS and BLINCYTO are both in phase 3 clinical trials in the country.

Amgen and BeiGene will also collaborate to advance 20 drugs from the former’s oncology pipeline in China and across the world. BeiGene will contribute towards the global research and development costs and will pay up to $1.25 billion to advance the drugs.

Amgen will pay royalties to the Chinese biopharma company on the sales of the 20 drug products outside of China, with the exception of AMG 510, the former’s KRASG12C inhibitor, which is being evaluated as a possible treatment for solid tumors.

Robert A. Bradway – chairman and CEO of Amgen said: “This strategic collaboration with BeiGene will enable Amgen to serve significantly more patients by expanding our presence in the world’s most populous country.

“Cancer is a leading cause of death in China and will only become a more pressing public health issue as the Chinese population ages. With its extensive commercial and clinical capabilities within China and a commitment to global quality standards, BeiGene is the ideal strategic collaborator as we seek to make a meaningful difference in the lives of millions of cancer patients in China and around the world.”

The deal is likely to be wrapped up in early 2020 and is subject to BeiGene shareholder approval, the expiration or termination of waiting periods under all applicable antitrust laws, and meeting of other customary closing conditions.

For Amgen, Goldman Sachs & Co. is the financial advisor, while Latham & Watkins is the legal advisor.

Recently, Amgen signed a deal to buy the global rights to Celgene’s psoriasis drug Otezla (apremilast) for $13.4 billion – Amgen acquisition of Otezla.