ChemoCentryx focuses on rare and orphan diseases, particularly those in the autoimmune, inflammatory and cancer domains. He recently won Food and Drug Administration approval for Tavneos, a treatment for blood vessel inflammation.
And the biggest biotech company wants ChemoCentryx under its umbrella.
“The acquisition of ChemoCentryx represents a compelling opportunity for Amgen to add to our decades-long leadership in inflammation and nephrology with Tavneos, a transformative, first-in-class treatment for vasculitis associated with (auto -neutrophil cytoplasmic antibodies),” Amgen Chief Executive Robert Bradway said in a written statement.
On today’s stock market, CCXI stock climbed 109.2% to close at 50.43, just below the repurchase price of $52 per share. Amgen stock fell slightly to 246.98.
CCXI stock: a huge premium
In addition to Tavneos, Amgen has access to three early-stage drugs. The company is also testing Tavneos in patients with a rare kidney disease and a condition that causes small, painful bumps to form under the skin. Amgen paid a 116% premium to CCXI’s closing price on Wednesday.
The acquisition helps Amgen fill a void as its biggest drugs begin to face generic competition, SVB Securities analyst David Risinger said in a statement to clients. Several key products will face generic rivals from 2025-30 when their patents expire. Risinger doesn’t think Amgen’s existing portfolio is enough to mitigate the losses.
“With Tavneos’ U.S. exclusivity through 2036 (if the patent extension is granted) and the drug’s potential to expand into multiple complement-mediated indications, we believe this transaction is a significant step for fill that gap,” he said.
Risinger expects more than $2 billion in Tavneos sales in 2030. The transaction is expected to close in the fourth quarter.
Amgen is a “logical partner”
SVB Securities analyst Joseph Schwartz says the deal is fair value for CCXI stock investors. As of Wednesday’s close, shares were down 34% year-to-date. The SPDR S&P Biotech (XBI) exchange-traded fund fell 25%.
Schwartz says he has long viewed ChemoCentryx as a takeover target, noting Astra Zeneca (AZN) set a precedent by acquiring Alexion Pharmaceuticals. Alexion was working on a similar suite of rare disease treatments.
“We view Amgen as a logical partner to take over the torch from ChemoCentryx and continue the launch of Tavneos in Anca-associated vasculitis, as well as seize early-stage opportunities,” he said. “ChemoCentryx stands to benefit from Amgen’s deep expertise in inflammation and nephrology.
It retained its outperformance rating on the CCXI share.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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