Amgen pays USD 2.7 billion for a 20.5% stake in BeiGene

Date:2019-11-01 Views:977

Just now, an important event took place in the pharmaceutical industry. After two years of cooperation with Celgene, BeiGene announced a global strategic partnership with AMGEN, another global biopharmaceutical giant.

This global strategic partnership on tumor treatment covers not only the development and commercialization of a number of AMGEN’s approved drugs for tumor treatment in China, but also the co-development of 20 anti-tumor drugs worldwide. Among them there is AMG 510 - the KRAS G12C inhibitor, which has been given a lot of attention recently.

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According to their agreement, AMGEN will take a 20.5% stake in BeiGene.

It is not only a win-win cooperation between two leading Chinese and American biotech companies, but also a cooperation involving the largest number of products and pipeline drugs in this industry. In addition, it is the largest equity investment in this field up to now.

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Hohn Oyler (CEO of BeiGene) in the activity of ENDPOINTS NEWS / PHARMCUBE held in Shanghai in October 2018 (Picture Resource: ENDPOINTS NEWS)

 

John V.Oyler, Co-founder, President and CEO of BeiGene said, “Our cooperation with AMGEN, a biotechnology pioneer and industry leader, demonstrates that AMGEN believes the unique clinical development capabilities of BeiGene can help accelerate the process of global drug development. We are excited to cooperate with AMGEN to exploit and commercialize its extensive anti-tumor pipeline drugs, with the goal of delivering early benefits to patients worldwide. By the end of 2020, we will probably provide cancer patients with as many as eight innovative products which are independently developed or introduced with authorization.”

 

According to various sources, the key content of the strategic cooperation between BeiGene and AMGEN lies in the following three aspects:

 

1. The commercialization of AMGEN’s approved drugs in China:

 

According to the cooperation agreement between AMGEN and BeiGene, BeiGene will be in charge of the commercialization of XGEVA, KYPROLIS and BLINCYTO in China for five or seven years; during the commercialized-running period, AMGEN and BeiGene will divide the profits and losses equally. After the commercialized-running period, BeiGene will be eligible to keep a product of them and have the royalties of five years of the products that will not kept by BeiGene after the commercialized-running period and that will be sold in China in the next five years.

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Dr. Wu Xiaobin

 

In order to achieve this goal in China, BeiGene will build a commercial team consisting of 700 employees with Dr. Wu Xiaobin as the leader. The team will be dedicated to selling XGEVA (DENOSUMAB), KYPROLIS (CARFILZOMIB) and BLINCYTO (BLINATUMOMAB) in China, and the latter two products are in the phase III of development. They will share profits and losses. The Chinese company will send 600 R&D personnel to form a development alliance to accelerate the development of 20 experimental anticancer drugs.

 

After five to seven years, AMGEN will acquire full rights to the two drugs, while BeiGene will retain the right of one drug (to be determined).

 

2. Global clinical development

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BeiGene’s R&D pipeline will be further expanded to more than 30 drugs (data source: BeiGene’s official website)

 

BeiGene has agreed to jointly develop 20 AMGEN anti-tumor pipeline drugs worldwide for solid tumors and hematological tumors, including the micro-molecule targeted drug under study - KRAS G12C inhibitor AMG 510, and the bispecific T-cell binding antibody (BITE®) immunotherapy.

 

AMGEN and BeiGene China will jointly bear the development expenses incurred worldwide. Specifically, BeiGene China will contribute a total value of up to USD 1.25 billion including development services and cash during the cooperation. BeiGene is entitled to a royalty for each product (excluding AMG 510) sold worldwide outside China.

 

BeiGene will be granted the right of commercialize each pipeline drug approved in China for up to seven years. During the seven years, both parties will share the profits or losses. After the expiration of the seven-year commercialization period, BeiGene will be entitled to five years of royalties in China.

 

BeiGene has the right to retain one of about every three approved pipeline drugs, totaling up to six drugs (excluding AMG 510), for commercialization in China. During this period, both parties will share the profits and losses.

 

3. Equity investment

 

AMGEN has agreed to purchase BeiGene’s common stocks that are worth USD 2.7 billion at USD 174.85 per share, 36% higher than the weighted average price of BeiGene’s 30-day trading volume on the Nasdaq Stock Market as of October 30, 2019. AMGEN will get a seat on BeiGene’s board of directors.

 

Judging from the number of directors, AMGEN obviously has no intention of gaining the administrative control power to BeiGene.

 

WIND data shows that there are 9 seats in BeiGene’s board of directors. Among them, BAKER BROTHERS LIFE SCIENCES, LP is the largest single shareholder, holding 18.63%; FMR LCC ranks the second, holding 10.23%; FMR CO., INC ranks the third, holding 9.88%, followed by the fund of Hillhouse Capital and John Oyler, the founder of BeiGene.

 

If the factors for equity changes of other shareholders are not taken into account, AMGEN is expected to become the largest single shareholder of BeiGene by holding 20.5% of total shares, and the second largest shareholder of BeiGene after equity penetration. The two sides did not disclose the time limit for the purchased shares, the subsequent lockup period and the consideration for reduction of shares.

 

The transaction has been approved by the board of directors of both companies and is expected to be completed in the first quarter of 2020 if the following conditions are met.

 

Conclusion

 

According to the analysis of the foreign media ENDPOINT NEWS, AMGEN’s rapid cooperation with BeiGene has benefited from the rapid development of several leading enterprises such as AstraZeneca in the Chinese market and the possession of a variety of advantageous drugs in similar products in the market. Such cooperation has been highly praised by players around the world.

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ROBERT A. BRADWAY, Board Chairman and CEO of AMGEN Photo source: AMGEN

 

“The strategic cooperation with BeiGene will enable AMGEN to expand its influence in the world’s most populous country and thus serve more patients. We have chosen a highly innovative strategic partner based on their commercial operations and coverage of clinical development in China subject to international quality standards. Cancer is the leading cause of death in China. With the aging of population in China, the cancer is bound to become a more pressing public health problem. We look forward to the cooperation with BeiGene to bring meaningful changes to the lives of millions of cancer patients in China and around the world,” ROBERT A. BRADWAY, Board Chairman and CEO of AMGEN, remarked.

 

 

References:

[1]AM­GEN TAKES A $2.7B STAKE IN BEIGENE, GAIN­ING A PROMI­NENT AL­LY IN CHI­NA TO HELP SEIZE A LEAD­ING ROLE IN CAN­CER DRUG COM­MER­CIAL­IZA­TION AND DE­VEL­OP­MENT

[2] BeiGene Announces its Global Strategic Cooperation with AMGEN in Cancer 

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