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Amgen buys BeiGene stake for $2.7bn to aid push into China

China's oncology market forecast to nearly double in size by 2026

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Amgen has agreed to buy a 20.5% stake in Chinese drugmaker BeiGene in a $2.7bn deal that will expand its presence in the Chinese cancer market.

The deal will result in BeiGene selling three of Amgen’s cancer drugs in China – an oncology market that is forecast to nearly double in size to almost $13bn by 2026 and said to have as many cancer patients as the US and Europe combined.

BeiGene will sell Xgeva (denosumab) for cancer that has spread to the bones, multiple myeloma therapy Kyprolis (carfilzomib) and Blincyto (blinatumomab) for leukaemia in China on a profit-sharing basis, according to the partners.

Xgeva was launched in China in September while the other two drugs are in phase 3 testing ahead of regulatory filings in the country.

In addition, Amgen and BeiGene will collaborate on the development of 20 other cancer drugs in Amgen’s pipeline for the Chinese market, with BeiGene sharing costs and contributing up to $1.25bn in funding.

Included in that part of the deal however is Amgen’s much-anticipated KRAS inhibitor AMG 510, and its bispecific antibody pipeline featuring anti-BCMA candidate AMG 420.

BeiGene – which has a 700-strong salesforce in China and hundreds of scientists working on drug development – will assume commercial rights in China for those 20 medicines for seven years after launch, including AMG 510.

Meanwhile, Amgen says it will also pay royalties to BeiGene on the sales of these products outside of China, with the exception of AMG 510.

The deal is expected to close in early 2020, and will result in a big increase in Amgen’s presence in the Chinese market. On that front Amgen has lagged behind other drugmakers like Merck & Co and AstraZeneca, which have both reported big sales gains from the market in recent quarters.

Amgen’s introduced its cholesterol drug Repatha (evolocumab) in China earlier this year, but that was its first-ever product launch there.

The move into China continues a strategic effort to expand its international presence, which has grown from 50 countries in 2011 to around 100 now.

“Amgen's capital allocation priorities remain unchanged," commented David Meline, Amgen’s chief financial officer, telling Reuters that this deal in China is the “remaining piece” of the puzzle for its geographic expansion.

“We will continue to grow our business through internal investment and business development, while providing attractive returns to our shareholders through a growing dividend and continued share repurchases.”

Article by
Phil Taylor

1st November 2019

From: Sales

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