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Home / Business / Amgen takes 20% stake in Chinese biotechnology BeiGene for $ 2.7 billion

Amgen takes 20% stake in Chinese biotechnology BeiGene for $ 2.7 billion



A researcher is preparing a test inside a laboratory at BeiGene Ltd.'s Research and Development Center in Beijing, China, Thursday, May 24, 2018.

Gilles Sabrie | Bloomberg | Getty Images

The biotechnology company Amgen announced on Thursday that it is investing $ 2.7 billion in BeiGene, taking a 20.5% stake in the Chinese biotechnology company and valuing it at about $ 13.5 billion.

Under the cash deal, Amgen will pay BeiGene shareholders $ 1

74.85 per share, a 25% premium to BeiGene & # 39; s closing price on the Nasdaq on Wednesday.

The BeiGene stock jumped 7% in afternoon trading on Thursday. Amgen shares were down about 1%.

BeiGene will commercialize some of Amgen's cancer drugs to be sold on the Chinese market, the companies said in a statement. Amgen will also work with BeiGene to develop 20 new drugs from its cancer pipeline in China and elsewhere. The deal, which is expected to conclude in early 2020, increases Amgen's footprint in China's rapidly expanding pharmaceutical market.

"For several years, we have had one of our most important focuses for the company expanding its operations globally," Amgen CFO David Meline told CNBC. "This is an important piece that remains for us, and we think it will fill that chessboard, if you will."

BeiGene develops molecularly targeted and immunologic drugs to treat cancer. With about 4 million people diagnosed with cancer annually, Amgen says it has expanded its geographical presence from about 50 to 100 countries since 2011.

in the West or other parts of Asia, "said Murdo Gordon, Amgen's Executive Vice President for Global Commercial Operations

The deal also comes amid the ongoing US trade war with China, with President Donald Trump recently pushing US firms to curtail financial investment in Chinese entities.

Meline said Amgen is "very conscious of the dialogue between governments. "

" We do not expect there to be any reasons why there would be a political backlash because it is quite okay, to be honest, "he added.

John Oyler, Chairman and CEO of BeiGene , also commented on trade talks, saying that the company is only focused on trying to fight cancer. "

" We say this all the time, but cancer is a habit lie enemy, "Oyler said. "It has no borders, and our company has no borders. BeiGene is a global company; we happen to have a lot of strength in China, but we fight everywhere we can. We think this is a global struggle."

Goldman Sachs acts as financial adviser for Amgen, while Latham & Watkins serves as legal counsel. Morgan Stanley serves as the exclusive financial advisor for BeiGene.

BeiGene will spend as much as $ 1.25 billion on the development program. Amgen will pay royalty to BeiGene for the sale of these products outside of China, with the exception of the KRAS drug AMG 510.

– CNBC's Meg Tirrell contributed to this report.


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