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By Allison Prang and Jared S. Hopkins
U.S. drugmaker Amgen Inc. said it is buying a roughly 20% stake in a Chinese biotechnology company for $2.7 billion in cash, further demonstrating China's emergence as a key market for foreign pharmaceutical companies.
Amgen said BeiGene Ltd., a Beijing-based company focused on oncology, is going to commercialize certain Amgen treatments in China and will split those earnings or losses.
BeiGene will take three different Amgen products to market: Xgeva, a prescription bone treatment; Kyprolis, a treatment for myeloma; and Blincyto, a leukemia treatment.
BeiGene will ultimately be able to retain the rights to one of those treatments and earn royalties on the others for an additional five years after the commercialization period, Amgen said. Amgen said Xgeva was introduced in China last month. The other two treatments are in Phase III trials.
BeiGene and Amgen also will collaborate on 20 of Amgen's oncology medicines. Amgen said that BeiGene will help cover expenses for research and development "and contribute up to $1.25 million to advance these medicines."
Amgen expects the deal to close early next year.
China has increasingly been approving foreign drugs, following a series of policy moves by China to provide its huge population with new treatments, particularly those that treat cancer. Merck & Co. earlier this week reported that sales grew by 90% in China during the third-quarter. AstraZeneca Chief Executive Pascal Soriot said last year that he expected China to eventually overtake Europe as the company's second-largest market. The merger of Pfizer Inc.'s off-patent drug business, Upjohn, with Mylan NV offered Mylan expanded geographic reach in China where Upjohn has a strong presence.
For Amgen, BeiGene's experience with the changes to China's health care, including advancing products through the country's revised reimbursement programs, helped make it an attractive partner, according to Murdo Gordon, Amgen executive vice president for global commercial operations. Amgen was also impressed with the commercial infrastructure of BeiGene, which was founded in 2010 and markets three products in China.
"They're really in a good position," Mr. Gordon said in an interview.
International expansion has been the company's goal for about five years, with Asia a critical component, Dave Reese, Amgen's research and development chief, said in an interview.
"This deal puts into place the last missing piece of the puzzle in terms of that geographic expansion," Dr. Reese said.
Earlier this year, Amgen began selling its first drug in China, the cholesterol-lowering treatment Repatha. "The performance there has exceeded our expectations," Mr. Gordon said, noting additional products are expected to launch in China.
Amgen, based in Thousand Oaks, Calif., recently agreed to buy Celgene Corp.'s psoriasis medicine Otezla for $13.4 billion. Amgen has been under pressure recently by the introduction of copycats to its white-blood-cell booster Neulasta and calcium reducer Sensipar.
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(END) Dow Jones Newswires
October 31, 2019 19:58 ET (23:58 GMT)
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