Amgen is shelling out nearly $4 billion to acquire ChemoCentryx, the latest in a string of M&A moves for the pharmaceutical giant and one that helps the company expand its approach to treating autoimmune diseases, and potentially also cancer.
ChemoCentryx’s main asset is Tavneos, a treatment for ANCA-associated vasculitis, an autoimmune disease that damages organs, particularly the kidneys. FDA approval of Tavneos last fall made the twice-daily pill the first treatment specifically developed for this rare and potentially fatal condition.
Amgen’s immunology portfolio is led by Enbrel, a blockbuster rheumatoid arthritis drug. Like many of the top-selling immunology drugs currently available, Enbrel is a large molecule biologic given as an injection. With ChemoCentryx, Thousand Oaks, California-based Amgen is betting on an immunology drug that’s more along the lines of its plaque psoriasis medicine Otezla, a small molecule that comes in a more patient-friendly pill form. ChemoCentryx brings Amgen a company entirely focused on developing small molecule drugs that are alternatives to injected or infused biologics.
Speaking on a Thursday conference call, Amgen CEO Bob Bradway focused his ChemoCentryx comments on the commercialization opportunity for Tavneos. ANCA-associated vasculitis patients need this drug because the older medicines that have been used to treat the disease, mainly immunosuppressants and steroids, have harsh side effects, he said. As part of Amgen, the drug can leverage the pharma giant’s connections with prescribing physicians.
“Decades of leadership in immunology and nephrology will allow us to add value to the Tavneos launch, reaching many more patients, and much more quickly, than would otherwise have been possible,” Bradway said.
In ANCA-associated vasculitis, white blood cells called neutrophils attack blood vessels and spark inflammation. The disease develops when a part of the immune system called the complement system is dysregulated. Tavneos is a small molecule designed to block a pro-inflammatory component of the complement system that’s found on neutrophils. In its 2021 annual report, ChemoCentryx said that its drug appears to offer a more targeted approach than Soliris and Ultomiris, both of them blockbuster antibody drugs from AstraZeneca that address the complement system to treat other disorders. That targeted effect could reduce the risk of infections, though ChemoCentryx also notes that serious infections have been reported in patients treated with its drug.
If Amgen plans to use the ChemoCentryx drug to challenge the AstraZeneca products, executives aren’t saying so outright. But Tavneos offers a “pipeline in a product” opportunity. In addition to its approved use in ANCA-associated vasculitis, Mountain View, California-based ChemoCentryx has reached mid-stage testing of the drug in hidradentis suppurativa, a chronic inflammatory skin condition whose current treatments include biologic medicines. Preliminary data from a Phase 2 test showed the drug did not meet the main goal in the overall study population, though the company said it has positive results in a subgroup of patients. Starting a Phase 3 study in patients with severe hidradentis suppurativa depends on feedback from the FDA, ChemoCentryx said in its financial reports. The company also has Phase 2 data for Tavneos in complement 3 glomerulopathy, a rare kidney disorder with no FDA-approved therapies.
Lupus nephritis, an autoimmune kidney disorder whose current treatment options include biologic medicines, is another disease target for Tavneos. ChemoCentryx had said it expects to begin clinical testing in this indication in the second half of this year. CCX507, an orally dosed drug candidate for inflammatory bowel disease, is being readied for Phase 2 testing.
ChemoCentryx hopes its small molecule approach to traditionally biologic targets can also apply to cancer. Some of the top-selling cancer immunotherapies belong to a class of drugs called checkpoint inhibitors. These antibody drugs block proteins that cancers use to evade the immune system. ChemoCentryx’s CCX559 is an orally administered small molecule that targets checkpoint proteins. This drug could provide an alternative to currently available checkpoint inhibitors, large molecule drugs that are dosed as infusions. CCX559 is in Phase 1 testing.
David Reese, Amgen’s executive vice president, research and development, acknowledged the clinical research that ChemoCentryx has done with Tavneos in additional indications. He said Amgen and ChemoCentryx will look at the data to develop the best path forward for addressing diseases that have few effective therapies. Amgen executives did not discuss the other drug candidates in the ChemoCentryx pipeline.
Amgen has been an active acquirer as of late. Otezla was purchased from Bristol Myers Squibb in 2019 for $13.4 billion, a deal made to satisfy Federal Trade Commission requirements for BMS’s purchase of Celgene. Last year, Amgen reached a $1.9 billion deal to acquire cancer drug biotech Five Prime Therapeutics. Months later, Amgen agreed to pay $400 million up front for global rights, excluding Japan, for a Kyowa Kirwin antibody in development for atopic dermatitis. In June, Amgen struck a $900 million deal to acquire antibody drug developer Teneobio.
For ChemoCentryx, Amgen is paying $52 cash for each share of the biotech, a more than 115% premium to the stock’s Wednesday closing price. The deal values ChemoCentryx at $3.7 billion.
The boards of directors of both companies have approved the transaction, which the companies expect will close in the fourth quarter of this year. The merger agreement bars ChemoCentryx from soliciting other bids or even engaging in talks with other parties about another proposal. If ChemoCentryx breaches that provision, or if an unsolicited superior offer emerges and the biotech terminates the Amgen deal, it must pay a $119 million termination fee, according to the merger agreement.
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