Amgen and Five Prime Therapeutics
Deal value: $1.9 billion
Premium: 78% over its previous day close
Date announced:March 4, 2021
Amgen hasn't been an active player in M&A under chief executive Bob Bradway and has generally preferred to go down the licensing route. Last year, though, the company couldn't resist making a bid for San Francisco-based Five Prime Therapeutics and its pipeline of cancer therapies.
The $1.9 billion acquisition is the first made by Amgen since it snapped up Onyx Pharma for $10 billion almost nine years ago. The biotech must have been impressed by Five Prime's lead drug bemarituzumab, a potentially first-in-class anti-fibroblast growth factor receptor 2b (FGFR2b) antibody that turned in positive results in gastric cancer in November 2020.
In addition, Amgen scored a couple of other clinical-stage candidates from the Five Prime takeover, including the phase 1 CD80-Fc fusion protein FPT155 and a BMS-partnered anti-Tim-3 antibody. Still, the value of the deal rests mainly on the FGFR2b drug.
The phase 2 FIGHT trial tested bemarituzumab with chemotherapy as a first-line therapy for advanced gastric and gastroesophageal junction (GEJ) cancer and met all its efficacy objectives, with the drug posting significant improvements in overall survival, progression-free survival and overall response rate when compared with chemo alone.
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The study enrolled 155 people with FGFR2b-positive tumors, a subpopulation that accounts for 30% of all non-HER2-positive gastric and GEJ cancer patients. It compared the antibody to placebo, both given on top of a chemo regimen known as mFOLFOX6.
While some market watchers raised questions about the statistical analyses used in the trial and a high dropout rate among patients treated with the antibody, the readout sparked a three-fold increase in Five Prime's share price to the $23 range.
Amgen's buyout for $38 per share was a premium on that leap, although it came well below Five Prime's highs of $50-plus in 2017, before the company's previous lead drug cabiralizumab flunked clinical trials two years ago. That led to a cleanout of staff and senior management and a refocus on bemarituzumab—now clearly a canny move.
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Just before the Amgen deal closed in April, the FDA had awarded a breakthrough designation to the antibody based on the results of the study, which Amgen maintains is the first to investigate targeting overexpression of FGFR2b in cancer. It also has little to compete with it in the industry pipeline
The company plans to expand testing of the antibody to include other epithelial cancers, including those affecting the lung, breast and ovaries, amongst others. The antibody is also partnered with Chinese company Zai Lab, so Amgen has a royalty position on sales in China.
Aside from its Five Prime buyout, Amgen has made some other noteworthy deals in recent years. The company bought psoriasis medicine Otezla (apremilast) from Celgene/BMS for $13.4 billion, and signed a BeiGene alliance for $2.7 billion that gave it a 20.5% stake in the company, and a deal to sell cancer drugs in China.