- Amgen will buy cancer drugmaker Five Prime Therapeutics for $1.9 billion in a rare public company acquisition by the large California biotech, which has been investing heavily to build up its oncology business.
- The deal, announced by the companies Thursday, is a dramatic outcome for Five Prime, which as recently as last March traded for less than $2 per share. Per terms of the buyout, Amgen will pay $38 per Five Prime share, a nearly 80% premium over the stock's closing price of $21.26 Wednesday.
- Five Prime's recent market rebound has been fueled by the success last fall of a mid-stage study testing the company's experimental stomach cancer treatment bemarituzumab. Results suggested adding the antibody drug to chemotherapy could improve response rates and extend survival in patients with a certain type of gastric cancer.
Amgen's last significant public company acquisition was a nearly $10 billion buyout of Onyx Pharmaceuticals in 2013. That deal brought in the multiple myeloma treatment Kyprolis and followed two other early-decade acquisitions that gave Amgen the cancer drugs Imylgic and Blincyto.
None of the three drugs became big sellers, however, leaving Amgen's oncology business smaller than many of its peers that had found success with targeted treatments and immunotherapies.
Over the past couple years, however, Amgen's put more resources toward cancer research, particularly a drug called sotorasib that may become the first treatment capable of targeting mutations in a gene known as KRAS. The California biotech has also invested heavily in so-called bispecific antibodies, which simultaneously latch onto cancer cells and immune cells.
Amgen views Five Prime's bemarituzumab as a good fit, highlighting Thursday the recent promising findings from Five Prime's Phase 2 study. The drug targets a protein called FGFR2B, which the companies estimate is overexpressed in the tumors of about 30% of people diagnosed with a certain type of gastric cancer.
Results from the trial indicated adding bemarituzumab to chemotherapy improved treatment response over chemotherapy alone in previously untreated patients, and held tumor growth in check for longer. The data also suggested Five Prime's drug extended overall survival. But the study was small, enrolling about 150 patients, and showed a substantially higher number of participants on bemarituzumab discontinued treatment due to side effects.
"One of the things that really gave us confidence here was the overall internal consistency of the data — some of the most consistent data you'll see in randomized Phase 2 trial in oncology," said David Reese, Amgen's head of R&D, on a Thursday conference call.
Reese indicated Amgen would be having discussions with regulators about a potential path toward an approval application, but wouldn't speculate on whether an accelerated clearance for the drug might be possible. The company anticipates a Phase 3 study could resemble the Phase 2 trial in design, Reese said.
Amgen also appears to have been drawn to the drug as supportive of its expansion into Asia-Pacific markets, where gastric cancer is particularly prevalent. In November 2019, Amgen took a roughly 20% stake in Chinese biotech company Beigene as part of an unusual research and marketing collaboration.
While the acquisition is Amgen's first significant public company buyout in some time, the company has recently signaled increased interest in dealmaking.
"The Five Prime purchase is a fairly small transaction for Amgen relative to our expectations for the year and Amgen's capabilities for M&A, so we believe there could be more to come to further build out the pipeline," wrote Geoffrey Porges, an analyst at SVB Leerink, in a note to clients.
For Five Prime, the deal marks a remarkable turnaround after years of clinical setbacks, executive departures and layoffs. Disappointing data for a drug Five Prime was developing with Bristol Myers Squibb eroded the company's stock price from a late 2016 high of over $60 a share. Multiple restructurings followed, leading to layoffs of more than half the company's workforce.
But shares quadrupled in value last November, when Five Prime first announced results from its Phase 2 study of bemarituzumab.
The companies expect the deal to close in the second quarter.
Note: This story has been updated to include mention of Amgen's expectations for further study of bemarituzumab.