Amgen’s headquarters in California. The company said it will pay $52 a share for ChemoCentryx.
Photo: Patrick T. Fallon/Bloomberg News
Amgen said Thursday it will pay $52 a share for ChemoCentryx, more than twice the company’s share price at the close of trading on Wednesday.
The deal is expected to close in the fourth quarter, pending approval by ChemoCentryx shareholders and regulators.
The biotech sector has struggled over the past year, in part because of a slowdown in deal making as well as scientific setbacks in the industry and macroeconomic factors such as rising interest rates.
Analysts and investors have been watching for mergers to pick up as larger companies look to boost their product pipelines and help fuel sales growth.
The deal for ChemoCentryx could augur more deal making in the sector, especially after the valuations of potential targets have dropped.
& Co. has been aiming to purchase cancer drugmaker
The Wall Street Journal has reported.
The SPDR S&P Biotech ETF, an equal-weighted index of biotech stocks, has fallen more than 30% over the past 12 months, compared with a drop of about 6% in the S&P 500 over the same period. ChemoCentryx shares have fallen about 34% so far this year, but are up nearly 60% over the past 12 months.
ChemoCentryx, based in San Carlos, Calif., was founded 25 years ago by Chief Executive
The company won its first drug approval late last year with Tavneos, a treatment for a group of rare diseases called anti-neutrophil cytoplasmic autoantibody-associated vasculitis that inflame and destroy small blood vessels, resulting in damage to the kidneys, lungs and other organs.
ChemoCentryx sells Tavneos at a list price of $14,450 for a 30-day supply, or about $175,800 a year.
Tavneos had $5.4 million in U.S. sales in the first quarter, and is projected to have $10.6 million in second-quarter sales when ChemoCentryx reports financial results for the quarter next week, according to FactSet.
Analysts project $59 million in total sales this year, and $164.35 million in 2023, according to FactSet.
“We are excited to join in the Tavneos launch and help many more patients with this serious and sometimes life-threatening disease,” said Amgen Chief Executive
ChemoCentryx also has early-stage drugs in development for other diseases including ulcerative colitis and cancer.
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