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Pharmaceutical industry

Amgen Acquires Tularik for $1.3 Billion, Expanding Biotech Leader's Product Pipeline

Strategic Insights

— 1 min read

Amgen Inc. has acquired Tularik Inc., a gene specialist, for $1.3 billion in equity, expanding its product pipeline and filling its core therapeutic concentrations in inflammation. The deal values Tularik at $25 per share, a 47% premium to its previous closing price of $17 per share. Amgen, the world's largest biotechnology concern, has maintained its guidance for fiscal 2004 adjusted earnings at $2.30 to $2.40 per share despite the acquisition.

Key Takeaways:

  • Amgen's acquisition of Tularik adds five new product candidates to its pipeline, including liver cancer treatment T67, which is currently in pivotal human trials.
  • The deal values Tularik at $25 per share, a 47% premium to its previous closing price of $17 per share.
  • Amgen has maintained its guidance for fiscal 2004 adjusted earnings at $2.30 to $2.40 per share.
  • The acquisition underscores a slow but steady consolidation of the biotechnology industry, with Amgen, the world's largest biotechnology company, pursuing Big Pharma-like growth-through-acquisition strategies.
  • The deal also highlights Amgen's commitment to expanding its presence in the San Francisco area, one of the world's major research hubs.
  • Tularik's gene-regulation technology, which blocks biochemical reactions associated with inflammatory disease and cancer, aligns with Amgen's product line-up, including Enbrel, a rheumatoid arthritis treatment.
  • Amgen has a history of acquisitions, including its purchase of Seattle-based Immunex Corp. in a deal valued at $16 billion in 2001.

Statistics:

  • Amgen's acquisition of Tularik values the gene specialist at $25 per share.
  • The deal is a premium of 47% over Tularik's previous closing price of $17 per share.
  • Amgen's annual sales of Enbrel account for about $1.3 billion, about an eighth of its overall revenues.
  • Tularik's lead candidate, T67, is in pivotal human trials for liver cancer treatment.
  • Tularik has a gastric and esophageal cancer drug, T607, in Phase 2 clinical trials.

Sources:

  • Amgen Inc. press release, quoting Chairman and CEO Kevin Sharer, CFO Gus Poulos, and President and COO Ben Curry.
  • Amgen's 2001 acquisition of Immunex Corp., valued at $16 billion.
  • Morningstar Inc. analyst report, quoting analyst Heather Brilliant.
  • Latham & Watkins LLP law firm announcement, quoting partners Charles Ruck, Paul Tosetti, and Christopher Kaufman.
  • Cooley Godward LLP law firm announcement, quoting partner Suzanne Hooper.
  • Goldman Sachs financial advisory services announcement, quoting partner Geoffrey Parker.

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