Biopharmaceutical company Amgen Inc has confirmed that it will purchase ChemoCentryx Inc for $3.7 billion. While ChemoCentryx shares are down 34% this year, the announcement saw them double in value to $51.40 before trading commenced. To complete the deal, Amgen will be required to pay $52 per share in cash; a premium of nearly 116% on ChemoCentryx’s stock’s closing price on Wednesday.
By acquiring ChemoCentryx, Amgen will be looking to add the company’s newly approved anti-inflammation treatment to its product portfolio. While Amgen’s arthritis drug, Enbrel, has been a top seller, it now faces stiff competition from new rivals that have recently entered the market. Furthermore, the drug’s patent is set to expire in 2029.
One of the main targets for Amgen was ChemoCentryx’s Tavneos, which was approved late last year. Used to treat a rare form of blood vessel inflammation, Tavneos raked in $5.4 million in sales during the first quarter following its launch.
In addition to Tavneos, there are three drugs that are currently going through early-stage trials that are to be used to treat inflammatory diseases, as well as a cancer drug. Analysts expect the company’s sales to exceed $1 billion by 2027.