Amgen plows US$2.7b into 20.5pc stake in BeiGene, HK shares rise

Friday, November 01, 2019

Amgen Inc will take a 20.5 percent stake in Chinese-American drug developer BeiGene under a deal to develop and commercialize about two dozen of Amgen’s on-market and experimental cancer drugs in China, Bloomberg reports.

BeiGene shares in Hong Kong jumped by 29.98 percent at HK$108.40 as of 11:15am local time.

Amgen will buy about US$2.7 billion worth of Beijing and Cambridge, Massachusetts-based BeiGene’s shares. It has agreed to pay US$174.85 per American depositary receipt, a 26 percent premium to where the U.S.-traded shares closed Wednesday. It will also take a seat on BeiGene’s board. 

BeiGene ADRs jumped by 27 percent in post-market trading in New York on Thursday, while Amgen was little changed.

Under the agreement, BeiGene will take over Chinese commercialization of three drugs used to treat cancer and its effects: Xgeva, which is already on the market in China, and Kyprolis and Blincyto, which are near approval.

The companies will equally split any profit or loss. “We’ve been working to expand our strategy geographically over the last four or five years,” Murdo Gordon, Amgen executive vice president of global commercial operations, said in a telephone interview. “We’re largely complete in that, and this is really the missing piece of the puzzle.”

BeiGene will also work to develop and commercialize 20 of Amgen’s experimental oncology drugs. BeiGene will put in US$1.25 billion for that effort, and Thousand Oaks, California-based Amgen will help fund development and pay royalties on the products if Amgen sells them outside of China.