Amgen to buy Five Prime Therapeutics in $1.9 million deal

Amgen is buying Five Prime Therapeutics for about $1.9 billion to expand its line of gastric cancer drug candidates and its presence in Asia-Pacific, the companies said.

Amgen has been looking to grow in the oncology market in the region since gaining a toehold in China in 2019 through a 20.5 per cent stake in cancer drugmaker BeiGene for nearly $3 billion. It expects the region to contribute about a quarter of its growth over the next 9-10 years.

Through the latest deal, Amgen will get access to Five Prime’s lead drug candidate, bemarituzumab, which is ready to enter a late-stage study for treating advanced gastric cancer.

“While gastric cancer may be a small market in the US, it could provide a significant opportunity in Asia,” Truist Securities analyst Robyn Karnauskas said.

Amgen will also get a royalty share on future sales of bemarituzumab in China, where Five Prime has a marketing and development deal with Zai Lab.

Gastric cancer afflicts about 680,000 patients in China each year compared to about 25,000 people in the United States, according to Jefferies analyst Michael Yee.

The treatment had shown improved overall survival and reduced risk of cancer progression in a mid-stage study.

Besides China, there is a good opportunity for the drug in countries like Japan, Korea and Taiwan, Amgen’s commercial operations head Murdo Gordon said on a conference call.

The treatment adds to the drugmaker’s other gastric cancer drug candidates, AMG 910 and AMG 199, which are in early-stage trials.

Amgen said it will pay $38 per Five Prime share, representing a premium of nearly 79 per cent to the company’s last closing price of $21.26.

(Edits by EP News Bureau)