Amgen goes on buying binge

Biotech leader Amgen to acquire Ilypsa and Alantos for combined $720 million

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THOUSAND OAKS, Calif.—In two separate moves that shouldn't have an effect on the company's bottom line anytime soon, biotech giant Amgen Inc. announced only two days apart that it would acquire Ilypsa, a developer of drugs for renal disorders, for $420 million and diabetes and inflammatory disease specialist Alantos for $300 million. With both companies, Amgen acquires lead programs that are currently in Phase II clinical trials.

Alantos' lead candidate is ALS 2-0426, a DPP-IV inhibitor for the treatment of type II diabetes. DDP-IV is a target receiving a lot of money and interest from a number of different companies. Last fall, Merck gained approval for its DPP-IV therapeutic for type II diabetes called Januvia, and Novartis has also stepped up to the plate with its entry Galvus, for which an NDA was submitted at the end of March.

Amgen is not the first large pharma company to show interest in Alantos' DPP-IV program. Last October, Alantos granted rights for the sale of ALS2-0426 outside North America with Servier, a deal that could bring in as much as $75 million if all milestones are met.

In addition to the type II diabetes program, Alantos is also moving forward with its preclinical work on matrix metalloproteinase -13, a small-molecule candidate for the treatment of osteoarthritis with potential to treat rheumatoid arthritis and other indications.

"We are pleased to add this clinical stage DPP-IV inhibitor to our growing portfolio of therapeutics for the treatment of metabolic diseases," says Roger M. Perlmutter, Amgen's executive vice president for research and development, in a statement announcing the deal. "We also intend to pursue the MMP program with the hope of bringing a novel, disease-modifying therapy into the clinic for osteoarthritis."

The Ilypsa acquisition is a bit more curious, if only for the timing of it. Ilypsa's lead candidate, ILY 101, is a phosphate binder for the treatment of hyperphosphatemia in chronic kidney patients on kidney hemodialysis. Also in Phase II trials, the acquisition appears to be a solid attempt at strengthening the company's nephrology portfolio and—along with Alantos—backfilling its pipeline.

But Amgen, at the time the acquisitions were announced, was also a company that needed some good news. Earlier this year, an FDA panel recommended more restrictive labeling for two of its successful anemia drugs, Aranesp and Epogen, and it also received bad news from European regulators concerning Vectibix—the jewel of its $2.2 billion acquisition of Abgenix—indicating it wouldn't be approved as a treatment for colorectal cancer. As a result of these and other events, Amgen's stock has been in a steady decline since the beginning of the year, at press time trading around $55, off nearly 30 percent from its 52-week high of $77.

"It's been a tough year for Amgen so far," says Robbert van Batenburg, head of research with Louis Capital Markets, New York. "Even with the recent share buyback, the stock hasn't budged so that says something."
While a number of brokerage firms have downgraded Amgen stock as a result of the FDA announcements, there appears to be a growing consensus that the fears surrounding the class of drugs called ESAs has been mostly overblown. Further, the stronger language suggested for Aranesp and Epogen were for off-label uses which comprise a much smaller percentage of sales.

As for Vectibix, van Batenburg still sees it as "the only thing that is really sparkling right now in Amgen's pipeline" with potential sales of as much as $5 billion annually. For Ilypsa, the $420 million cash offer comes less than four years after the company was spun out of Symyx Technologies (see sidebar) and is an endorsement of the high-throughput discovery platform developed there. In addition to its ILY 101 program for chronic kidney disease, Ilypsa also has programs in kidney, infectious and metabolic diseases.

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