Amgen offers $167m for drug discovery biotech Nuevolution

Amgen has agreed to buy Swedish biotech Nuevolution for around $167 million to boost its drug pipeline after an R&D collaboration showed promise.

The US pharma wants to buy Nuevolution for 1.61 billion Swedish crowns, and the biotech’s board has unanimously recommended the offer to shareholders.

Amgen has offered 32.5 Swedish crowns per share in cash, a premium of nearly 169% to Nuevolution’s closing price on Tuesday.

Nuevolution has been developing small molecule drugs since it was founded in 2001, focused on targets within inflammation, oncology, and immuno-oncology.

It has its own patent-protected DNA-encoded library drug discovery technology, which enables the efficient discovery of small molecule drug candidates, according to Amgen.

The companies have been working together since October 2016 in a multi-target collaboration, and two of the drugs developed have progressed at high speed.

Amgen has exercised a contractual opt-in right for the first of these two drugs, and the business combination will allow the two companies to work closer together.

The hope is that the combination of Nuevolution’s technology and drug discovery and R&D knowledge, backed by Amgen’s muscle in manufacturing and marketing will produce marketable products.

Amgen added that it does not want to change Nuevolution’s management team and key employees following the acquisition, and does not intend to alter operations or business locations.

Amgen will pay sign-on compensation to those who stay on after the closing of the offer, consisting of cash payments during a period of up to three years after closing of the offer and restricted stock units linked to Amgen's shares listed on Nasdaq in the US.

In this case it appears that the working relationship between Nuevolution and Amgen has been harmonious – but that has not been the case with all of the US pharma’s partnerships.

Amgen’s big tie-up with Novartis over the migraine drug Aimovig has turned very sour – the companies have become embroiled in a legal row over rights as sales mount.

Novartis is disputing a notice of termination served by Amgen, that seeks to tear up an expanded collaboration giving the Swiss pharma exclusive marketing rights in Canada and the rest of the world excluding Japan, and co-marketing rights in the US.