Market Overview

Amgen Acquires KAI Pharmaceuticals


In accordance with its belief that there is an unmet need in Secondary Hyperparathyroidism [SHPT], Amgen (NASDAQ: AMGN) announced this morning that it has acquired privately held KAI Pharmaceuticals for $315M cash.

J.P. Morgan commented on the merger this morning, explaining why San Francisco-based KAI is so valuable to already successful Amgen.

“KAI's lead candidate, KAI-4169, is a long-acting, peptide agonist of the calcium sensing receptor (CaSR) and is being developed for the treatment of SHPT in hemodialysis (HD) patients (phase 3 planning under way). We note that phase 2 data were encouraging, with statistically significant reductions in parathyroid hormone (PTH) relative to placebo. Recall, currently, Amgen has Sensipar for the same indication with the primary difference being Sensipar is a capsule whereas KAI-4169 is an IV,” the research firm said in a report.

Along with paying cash for the acquisition, Amgen also loaned KAI an unspecified amount of money to ensure further development of KAI-4169, (a novel peptide agonist of the human cell surface calcium-sensing receptor).

This announcement follows last week's breaking news that Amgen initiated a Phase 3 trial for its Anti-Scelrostin Antibody.

According to Deutsche Bank, “Amgen/UCB announced the initiation of the phase 3 program for AMG 785, which includes a randomized, placebo-controlled, 2-year study in >5,000 PMO women. The primary endpoint of this study is incidence of vertebral fractures at 12 months, and initial results are expected by the end of 2015. We have been waiting for this study to be launched for some time and view AMG 785 as one of the more exciting pipeline candidates in Amgen's portfolio due to 1) new mechanism of action (bone formation) and 2) synergies/leverage with the Prolia franchise.”

It appears the newest development will be well under way in the near future, as stockholders and the Board of Directors for both KAI and Amgen have already agreed on the transaction.

“Completion of the transaction is subject to customary closing conditions, including regulatory approvals. Following the completion of the transaction, KAI will become a wholly owned subsidiary of Amgen. J.P. Morgan Securities LLC acted as exclusive financial advisor and Latham & Watkins acted as legal advisor to KAI on the transaction. Amgen was advised by Sullivan & Cromwell LLP,” reported today.

Amgen is currently trading at $66.75, +3.91% YTD.

Posted-In: Deutsche BankAnalyst Color News Reiteration Topics M&A Analyst Ratings General Best of Benzinga


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