The biotech giant Amgen, Inc. (NASDAQ: AMGN) has announced a new deal for Five Prime Therapeutics (NASDAQ: FPRX), a clinical-stage biotechnology company focused on developing immuno-oncology and targeted cancer therapies. The company collaborates with leading global pharmaceutical companies and has therapies in pre-clinical and clinical development.
Amgen will acquire Five Prime Therapeutics for $38.00 per share in cash, representing an equity value of approximately $1.9 billion. The dollar-per-share amount is a 78% premium to Five Prime’s closing price on March 3, 2021. The transaction comes out to an estimated 232x Five Prime Therapeutics’ annualized revenues. However, the company reported a $145.9 million negative EBITDA for 2020.
The acquisition includes Bemarituzumab, a phase 3 ready, first-in-class program for gastric cancer, the third leading cause of cancer mortality worldwide. Amgen will leverage its presence in Japan and other Asia-Pacific markets to maximize bemarituzumab’s potential. The deal is expected to close Q2:21.
This deal helps Amgen remain competitive in the oncology market, as many other big players in the industry, such as Merck & Co., Inc. (NYSE: MRK) and Gilead Sciences, Inc. (NASDAQ: GILD) have been bolstering their pipelines through some major acquisitions. Gilead acquired Immunomedics (NASDAQ: IMMU) for $21 billion in September and Merck bought OncoImmune for $425 million in cash upfront, according to search results in our Healthcare Deal Database.
It’s been a while since we’ve seen Amgen announce a deal. Back in 2019, the company bought the worldwide rights to Otezla, the only oral, non-biologic treatment for psoriasis and psoriatic arthritis for $13.1 billion. The FTC ruled Celgene Corporation must divest Otezla as part of its ongoing regulatory approval process for Celgene’s merger with Bristol-Myers Squibb (NYSE: BMY). Otezla was a strong strategic fit with Amgen’s expertise in psoriasis and inflammation and complemented its existing inflammation franchise of biologics and biosimilar products.
