Amgen Enters into Collaboration with BeiGene for $2.7 Billion

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The transaction is expected to be finalized in early 2020.

Amgen announced it has entered into a strategic collaboration with BeiGene, a biopharmaceutical company in China, to expand its oncology presence in the country. Amgen will acquire a 20.5% stake in BeiGene for $2.7 billion in cash through the agreement.

According to an Oct. 31, 2019 Amgen press release, under the agreement, the cash amount represents a purchase price of $174.85 per BeiGene American Depositary Share on NASDAQ, a 36% premium to BeiGene's 30-day volume-weighted average share price.

Other terms of the agreement include:

  • BeiGene’s commercialization of Xgeva (denosumab), Kyprolis (carfilzomib), and Blincyto (blinatumomab) in China. BeiGene will gain the right to retain one of the products after five years and will be able to receive royalties on sales in China for an additional five years on the products not retained.

  • The companies will advance 20 medicines from Amgen’s oncology pipeline in China and worldwide. BeiGene will contribute up to $1.25 billion toward the medicine advancement, and Amgen will pay royalties to BeiGene on the sales of these products outside of China, with the exception of AMG 510, Amgen's KRASG12C inhibitor for solid tumor treatment.

  • BeiGene will have commercial rights to the 20 medicines in China for seven years after launch for those that receive approval in China. After the seven-year mark, BeiGene will retain rights to up to six of these products in China and the remaining products will revert to Amgen.

  • Amgen will maintain its commercialization of its non-oncology product portfolio in China.

  • Xgeva, Kyprolis, Blincyto, and Amgen’s additional oncology drugs will be manufactured at Amgen's facilities.

"This strategic collaboration with BeiGene will enable Amgen to serve significantly more patients by expanding our presence in the world's most populous country," said Robert A. Bradway, Amgen's chairman and CEO, in the press release. "Cancer is a leading cause of death in China and will only become a more pressing public health issue as the Chinese population ages. With its extensive commercial and clinical capabilities within China and a commitment to global quality standards, BeiGene is the ideal strategic collaborator as we seek to make a meaningful difference in the lives of millions of cancer patients in China and around the world."

The transaction is expected to be finalized in early 2020.

Source: Amgen