22:07 GMT +312 November 2019
Listen Live
    The discovery of this new protein could eliminate the need for cancer drugs and harsh chemo treatments.

    American Amgen to Expand Into China Taking Up 20.5% Stake in BeiGene

    © Flickr/ Derek K. Miller
    Get short URL
    0 08

    Due to the recent softening of Chinese regulations on pharmaceutical firms, US companies are increasingly looking to take advantage of the Chinese drug market, seeing western drugmakers such as AstraZeneca Plc (AZN.L) develop lucrative relationships in China.

    Biotech company Amgen announced on Thursday that it plans to invest $2.7 billion in Beijing-based BeiGene, purchasing a $13.5 billion 20.5% stake in the Chinese company.

    The deal, which is expected to materialise in 2020, will see Amgen’s influence in China’s pharmaceutical market grow significantly.

    “For a number of years, we’ve had as one of our key focuses for the company building out the business globally,” Amgen Chief Financial Officer David Meline told CNBC. “This is an important piece that was remaining for us, and we think that will fill out that chessboard, if you will.”

    In regards to economic uncertainty between the US and China, Meline said Amgen is “very conscious of the dialogue that’s going on between the governments.”

    “We don’t expect that there will be any reasons why there would be political pushback, because it’s pretty straightforward, to be honest,” he added.

    According to Amgen, it has expanded its reach from 50 to 100 countries since 2011 to meet the annual diagnosis of roughly 4 million people with cancer.

    “The focus now is ensuring novel therapies that address a high unmet medical need are approved as quickly as in the West or other parts of Asia,” said Murdo Gordon, Amgen’s executive vice president for global commercial operations.

    The American multinational will pay $174.85 respectively per share, a 25% premium on BeiGene’s Wednesday closing price, according to Nasdaq. During after-hours trading on Thursday, BeiGene’s stock shot up by 7%, while Amgen shares dropped around 1%. 

    BeiGene, which specialises in developing molecularly targeted and immuno-oncology cancer treatment drugs, is planning to spend $1.25 billion on the program, with Amgen paying royalties to BeiGene to sales outside of China, with the exception of the KRAS blocker AMG 510.

    The Chinese firm revealed in a statement that it will begin the commercialisation of cancer drugs for sale on the Chinese market. Amgen will also work alongside BeiGene in developing 20 new drugs in China and across the world.

    John Oyler, chairman and CEO of BeiGene, addressing recent developments regarding US-China trade talks, said the company is “just focused on trying to fight cancer.”

    “We say this all the time, but cancer is a common enemy,” Oyler said.

    “It doesn’t have any borders, and our company doesn’t have any borders. BeiGene’s a global company; we happen to have a lot of strength in China, but we’re fighting everywhere we can. We do believe this is a global fight.”

    Goldman Sachs is currently serving as a financial adviser to Amgen, with Latham & Watkins working as a legal adviser. BeiGene also has its own prestigious financial adviser with Morgan Stanley.

    The deal comes amid the backdrop of an ongoing trade war, with US President Donald Trump ramping up pressure on China, demanding US firms limit financial investments in Chinese companies as well as slapping tariffs on imported Chinese goods.


    Chinese Heart Drugs Linked to Cancer Recalled Across Europe
    Multiple Drug Companies Recall Blood Pressure Medications Over Cancer Risks
    Psychology Guru Jordan Peterson Checks Into Rehab After Drug Treatment Amid Wife’s Cancer Scare
    Zantac Heartburn Drugs Pulled From Shelves After FDA Cancer Warning
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik