Amgen stumps up $13.4bn to claim Otezla from Celgene

Celgene has the buyer it needed for Otezla, smoothing the way for its mega-merger with Bristol-Myers Squibb. Amgen has come forward with a $13.4 billion offer that some analysts say suggests a bidding war has been taking place.

The cash deal – which has a value of more than eight times Otezla’s $1.6 billion sales last year – puts the $74 billion takeover of Celgene by BMS on course to complete by the end of the year, satisfying antitrust concerns raised by financial regulators.

It also brings to an end recent speculation that Gilead Sciences was top of the buyer list, seeking a partner to its JAK inhibitor filgotinib which is spearheading a shift into the inflammation and immunology sector.

Amgen thinks Otezla (apremilast) is on course for at least five years of double-digit growth as the “only oral, non-biologic treatment for psoriasis and psoriatic arthritis.” It says the drug is a “strong strategic fit” with its own inflammation business, headed by blockbuster TNF blocker Enbrel (etanercept).

Enbrel is starting to succumb to biosimilar competition in some markets but is still patent-protected in the big US market, making $4.8 billion in US sales last year, albeit down 8% as lower-cost biosimilars emerged to rival therapies such as Johnson & Johnson's anti-TNF Remicade (infliximab).

Otezla gives Amgen a product with peak sales potential of $2.5 billion-plus and patent protection until 2028, just one year ahead of the time when the company thinks it can protect Enbrel from direct biosimilar competition if ongoing patent litigation continues to go its way.

Celgene and BMS were forced to divest the drug because BMS has an oral tyrosine kinase 2 inhibitor, BMS-986165, in late-stage development.

According to GlobalData, BMS-986165 could be a game-changer in psoriasis as it can be dosed orally but seems to offer efficacy that matches injectable biologic drugs for the skin disease like Enbrel.

Shares in Amgen dipped slightly after the news broke but quickly returned to positive territory, suggesting investors were happy with the plan despite the high ticket price. Meanwhile BMS and Celgene also both climbed as investors celebrated a healthy cash injection for the combined business.

“This agreement represents an important step toward completing our pending merger with Celgene,” said Giovanni Caforio, chief executive of BMS.

Meanwhile Amgen’s CEO Robert Bradway said: “We will take advantage of our 20 years of experience in inflammatory disease to realise the full global potential of Otezla as an affordable option for patients with…serious, chronic inflammatory conditions.”