Amgen to acquire Otezla® for $13.4 billion in cash

AmgenAmgen (NASDAQ: AMGN) announced today that it has entered into an agreement with Celgene Corporation (NASDAQ: CELG) in connection with its previously announced merger with Bristol-Myers Squibb Company (NYSE: BMY) to acquire worldwide rights to Otezla® (apremilast), the only oral, non-biologic treatment for psoriasis and psoriatic arthritis, and certain related assets and liabilities, for $13.4 billion in cash, or approximately $11.2 billion, net of the present value of $2.2 billion in anticipated future cash tax benefits. Amgen believes that the acquisition of Otezla offers many benefits including:
  • A strong strategic fit with Amgen's long-standing expertise in psoriasis and inflammation
  • A differentiated, oral therapy complementary to Amgen's existing inflammation franchise of innovative biologics and biosimilar products
  • At least low double-digit Otezla sales growth, on average, over the next five years
  • Acceleration of Amgen's near- and long-term revenue growth
  • Immediate non-GAAP EPS accretion
  • Intellectual Property exclusivity through at least 2028 in the U.S.
  • Worldwide rights which fit well with Amgen's international presence and global expansion objectives
  • Support of increased R&D investment in 2020 to advance Amgen's innovative pipeline of first-in-class molecules
  • No interruption in deployment of Amgen's capital allocation priorities

"The acquisition of Otezla offers a unique opportunity for Amgen to provide patients an innovative oral therapy for psoriasis and psoriatic arthritis that fits squarely within our portfolio and complements our Enbrel® and AMGEVITA® brands," said Robert A. Bradway, chairman and chief executive officer at Amgen. "We will take advantage of our 20 years of experience in inflammatory disease to realize the full global potential of Otezla as an affordable option for patients with these serious, chronic inflammatory conditions."

Otezla is the leading treatment in the post-topical, pre-biologic segment in its approved indications. Otezla is currently approved for three indications in the U.S. - the treatment of patients with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy; adult patients with active psoriatic arthritis; and adult patients with oral ulcers associated with Behçet's Disease. Otezla is approved in more than 50 markets outside the U.S., including the European Union and Japan, and has patent exclusivity through at least 2028 in the U.S.

Sales of Otezla in 2018 were $1.6 billion driven by strong volume growth. Amgen has stated previously that it will focus on medicines that can deliver sustained, long-term volume driven growth and the Company believes there is a significant opportunity to grow Otezla through global expansion and new indications, with expectations for Otezla to realize at least low double-digit sales growth, on average, over the next five years.

Strategic Benefits of the Transaction

This transaction will advance Amgen's strategy in several ways:
  • Bringing Innovative Medicines to Patients - The number of patients suffering from chronic inflammatory diseases is growing worldwide. Amgen is already a leader in this very large therapeutic category with Enbrel® (etanercept), a biologic medicine marketed by Amgen in the U.S. and Canada to treat several chronic inflammatory diseases, including moderate-to-severe rheumatoid arthritis, moderate-to-severe plaque psoriasis, and psoriatic arthritis (PsA). ENBREL and Otezla are complementary. ENBREL is most frequently prescribed to treat moderate-to-severe rheumatoid arthritis, while Otezla is positioned as a therapy of first-choice in patients with moderate-to-severe psoriasis who are not satisfied with topical therapies given its differentiated mechanism of action and established efficacy and safety profile. In PsA, Otezla is positioned for use in patients early in their disease and/or with moderate joint involvement. Additionally, studies are currently underway exploring potential new indications for Otezla, including mild-to-moderate psoriasis.
  • Expanding Geographic Reach - Otezla is approved in 54 countries, including major markets such as France, Germany and Japan. Amgen is well positioned to continue driving Otezla international sales growth.
  • Investing for Long-Term Growth with Uninterrupted Capital Allocation Plans - The transaction is expected to contribute to Amgen's near- and long-term revenue growth rate and will be immediately accretive from close to non-GAAP earnings per share growth, with acceleration thereafter. Amgen will finance the transaction with current balance sheet cash and expects to retain its investment grade credit rating. Additionally, Amgen's capital allocation priorities will remain unchanged as we invest to grow our business through internal investment and business development, maintain an optimal capital structure to minimize our Weighted Average Cost of Capital and continue to provide capital returns to shareholders through a growing dividend and continued share repurchases.

The closing of the acquisition is contingent on Bristol-Myers Squibb entering into a consent decree with the Federal Trade Commission in connection with the pending Celgene merger, the closing of the pending merger with Celgene and the satisfaction of other customary closing conditions. The transaction is expected to close by the end of 2019.

"Otezla represents an exciting opportunity to strengthen Amgen's presence in inflammation and continue Amgen's geographic expansion," said Bradway. "We are excited about the opportunity that Otezla represents for Amgen, for our shareholders, and for patients worldwide, and we look forward to welcoming those staff members who support Otezla to the Amgen family."

Dyal Co. LLC is acting as the lead financial advisor to Amgen. Goldman Sachs & Co. is serving as a financial advisor and Sullivan & Cromwell LLP is serving as legal advisor to Amgen.

About OTEZLA® (apremilast)

OTEZLA® (apremilast) 30 mg tablets is an oral small-molecule inhibitor of phosphodiesterase 4 (PDE4) specific for cyclic adenosine monophosphate (cAMP). PDE4 inhibition results in increased intracellular cAMP levels, which is thought to indirectly modulate the production of inflammatory mediators. The specific mechanism(s) by which OTEZLA exerts its therapeutic action in patients is not well defined.

Please see Full Prescribing Information for Otezla®

About Amgen

Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.

Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.

Most Popular Now

Theravance Biopharma and Pfizer Inc. enter global …

Theravance Biopharma Ireland Limited, a subsidiary of Theravance Biopharma, Inc. (NASDAQ: TBPH) ("Theravance Biopharma") and Pfizer Inc. (NYSE: PFE) ("Pfizer") today anno...

Amgen and Allergan submit Biologics License Applic…

Amgen (NASDAQ:AMGN) and Allergan plc. (NYSE:AGN) today announced the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) fo...

Researchers identify immune-suppressing target in …

Researchers at The University of Texas MD Anderson Cancer Center have identified a tenacious subset of immune macrophages that thwart treatment of glioblastoma with anti-...

Lynparza recommended by FDA advisory committee for…

AstraZeneca and MSD Inc., Kenilworth, NJ, US (MSD: known as Merck & Co., Inc. inside the US and Canada) announced that the US Food and Drug Administration (FDA) Oncologic...

Old drug offers new hope for children with devasta…

A drug that once helped obese adults lose weight, but was withdrawn from the market due to heart risks, may be safe and effective for children with a life-threatening sei...

Intermittent fasting: live 'fast,' live longer?

For many people, the New Year is a time to adopt new habits as a renewed commitment to personal health. Newly enthusiastic fitness buffs pack into gyms and grocery stores...

Pharmacies leave customers hanging when it comes t…

Proper disposal of leftover medication, particularly antibiotics and opioids, can help reduce antibiotic resistance, prevent children from being poisoned and stop the mis...

Researchers determine how a specific protein regul…

Immune checkpoints are surface proteins that cancer cells use to evade immune response. These surface proteins are critical for cancer cell growth and drugs targeting the...

Lynparza approved in the US as a 1st-line maintena…

AstraZeneca and MSD Inc., Kenilworth, N.J., US (MSD: known as Merck & Co., Inc. inside the US and Canada) announced that Lynparza (olaparib) has been approved in the US f...

Scientists find a new use for already known anti-c…

The world scientific community is waging a difficult and prolonged war on cancer. New research in the field of immunogenic cell death can extend the area of drugs applica...

Farxiga granted FDA Priority Review for patients w…

AstraZeneca today announced the US Food and Drug Administration (FDA) has accepted a supplemental New Drug Application (sNDA) and granted Priority Review for Farxiga (dap...

Lilly opens Phase 3 clinical trial in RET-mutant m…

Eli Lilly and Company (NYSE: LLY) announced the opening of the LIBRETTO-531 clinical trial [NCT04211337] for selpercatinib, also known as LOXO-292, for treatment-naive RE...