Amgen Inc. AMGN, +0.44% announced Thursday an agreement to buy biotechnology company Five Prime Therapeutics Inc. FPRX, +78.22% in a cash deal valued at $1.9 billion. Five Prime shares were halted for news until 9 a.m. ET, while Amgen shares slipped 0.2%. Under terms of the deal, Amgen will pay $38.00 in cash for each Five Prime share outstanding, a 78.7% premium to Wednesday’s stock closing price of $21.26. The deal is expected to close in the second quarter of 2021. Five Prime’s lead asset is bemarituzumab, a “Phase 3 ready” treatment for gastric cancer. “The acquisition of Five Prime offers a compelling opportunity for Amgen to strengthen our oncology portfolio with a promising late-stage, first-in-class global asset to treat gastric cancer,” said Amgen Chief Executive Robert Bradway. Separately, Amgen affirmed its 2021 guidance ranges for adjusted earnings per share of $16.00 to $17.00 and for revenue of $25.8 billion to $26.6 million, which compare with the FactSet EPS consensus of $16.80 and revenue consensus of $26.5 billion. Shares of Amgen have gained 4.1% and Five Prime have soared 453.7% over the past 12 months, while the iShares Nasdaq Biotechnology ETF IBB, -1.52% has advanced 23.9% and the Dow Jones Industrial Average DJIA, +0.00% has gained 15.4%.
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