Amgen pays $2.7bn to harness BeiGene’s China marketing muscle
Fuelled by sweeping regulatory reforms and a massive ageing population, China is a key market for most big biopharma companies, and Amgen is no exception.
The US biotech has just agreed a $2.7 billion deal with BeiGene that will give it a rapid route to rolling out its cancer drugs in China – both approved and in the development pipeline – as it tries to capture a bigger slice of a market expected to approach a value of $145-$175 billion by 2022.
Under the terms of the deal, Amgen is buying a 20.5% stake in BeiGene for around $175 per share, around a 25% premium on its American depositary receipts (ADRs) before the deal was announced.
The Chinese company also gets commercialisation rights to three already-marketed cancer drugs, as well as co-development rights to 20 candidates in its oncology pipeline, while Amgen gets to “significantly accelerate” access to the world’s second-largest pharma market.
The marketed drugs are Xgeva (denosumab) for bone metastases, which has already been approved by the Chinese regulator and launched onto the market, as well as Kyprolis (carfilzomib) and Blincyto (blinatumomab) which are licensed elsewhere but in late-stage development in China. BeiGene and Amgen say they will share the profits and losses from the drugs.
Two of those drugs will eventually revert to Amgen, one after five years and one after seven years, but BeiGene gets to retain one product and will receive royalties on sales in China on the other two for an additional five years.
The two companies will also collaborate on the development of 20 pipeline drugs in China and elsewhere in the world, with BeiGene offering $1.25 billion in funding towards that effort in return for Chinese commercial rights for seven years to drugs that get approved.
The projects include AMG 510, a KRAS inhibitor generating a lot of excitement at Amgen after reporting clinical trial data in non-small cell lung cancer and colorectal cancer.
After that seven-year period, BeiGene will hold licenses for up to six of these products in China – excluding AMG 510 – and the companies will share profits until the Chinese rights revert to Amgen. The Chinese company will also be entitled to royalties on sales of these products outside of China, if approved.
“This strategic collaboration with BeiGene will enable Amgen to serve significantly more patients by expanding our reach in the world’s most populous country,” said the US firm’s chief executive Robert Bradway.
“Cancer is a leading cause of death in China and will only become a more pressing public health issue as the Chinese population ages.”
The deal is expected to close in the first quarter of 2020, providing it gets the backing of BeiGene shareholders and antitrust approvals.
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