Amgen Doubles Down on BeiGene Collaboration, Investing $421M More

Xconomy San Francisco — 

At the year’s start Thousand Oaks, CA-based Amgen closed a strategic collaboration with BeiGene, investing $2.8 billion to gain a presence in what’s becoming an ever-more essential market for global drug development. The investment earned it an R&D pact and ownership of about one-fifth of the Chinese oncology drug company.

Now the firm has snapped up a chunk of additional shares in a move to maintain its ownership stake as Beigene (NASDAQ: BGNE) priced an offering of about 145 million shares at $185 apiece to raise more than $2 billion.

Amgen (NASDAQ: AMGN) said its additional investment of about $421 million maintains its stake, initially 20.5 percent, at about 20.3 percent. At the time of the initial investment Amgen paid about $175 per share of Beigene. Shares of Beigene closed at $213.01 apiece Monday, up nearly 9 percent compared to Friday’s close. Over the same time Amgen’s share price moved by less than 1 percent, closing nearly unchanged at $250.04 per share.

Under the terms of the deal that closed in January, the companies are collaborating to move ahead 20 treatments from Amgen’s pipeline in China and globally. The first product involved in the pact, Amgen’s denosumab (Xgeva), a treatment for a rare condition called giant cell tumor of bone, last month transitioned to Beigene for commercialization.

The alliance closed roughly a year after Amgen launched its first-ever product in China, the LDL cholesterol-lowering treatment evolocumab (Repatha). Its ambitions in that country include other medicines outside of oncology, too, including denosumab (Prolia), a treatment that reduces the risk of fracture in postmenopausal women with osteoporosis.

“This additional investment reflects Amgen’s confidence in the progress the companies are making in their ongoing oncology collaboration in China, the world’s second largest pharmaceutical market,” the company said in a statement issued Sunday.

Beigene established its first office in the United States in 2015. The year following, it became the first biotech started in China to go public on the Nasdaq exchange, raising about $158 million in its debut. In 2017 it inked a deal with Celgene that garnered it $263 million up front in licensing fees for global rights to its lead cancer drug in solid tumors outside of Asia (excluding Japan), plus another $150 million for a nearly 6 percent equity stake—and control over its China operations. Since then it has also formed partnerships with Mirati Therapeutics (NASDAQ: MRTX), Zymeworks (NASDAQ: ZYME), and MEI Pharma (NASDAQ: MEIP). It earned its first FDA approval in 2019, for lymphoma drug zanubrutinib (Brukinsa).

Today Beigene’s US presence includes offices in Cambridge, MA, Ridgefield Park, NJ, and the California cities of Emeryville and San Mateo.

Image: iStock/SeanPavonePhoto