Putting puzzle pieces together on sky background with sunlight merger

Assembling puzzle pieces against the background of the sky with a fusion of sunlight

Amgen commits nearly $4 billion to acquire ChemoCentryxthe latest in a series of mergers and acquisitions for the pharmaceutical giant and one that is helping the company expand its approach to treating autoimmune diseases and potentially cancer as well.

ChemoCentryx’s main asset is Tavneos, a treatment for ANCA-associated vasculitisan autoimmune disease that damages organs, especially 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 drug for rheumatoid arthritis. Like many of the best-selling immunology drugs currently available, Enbrel is a large-molecule biologic product administered as an injection. With ChemoCentryx, Thousand Oaks, Calif.-based Amgen is betting on an immunology drug that is more similar to the plaque psoriasis drug Otezla, a small molecule that comes in a more patient-friendly pill form. ChemoCentryx brings to Amgen a company entirely focused on developing small-molecule drugs that are alternatives to injected or infused biologics.

Speaking on a conference call Thursday, Amgen CEO Bob Bradway focused his comments on ChemoCentryx on the possibility of commercializing Tavneos. Patients with ANCA-associated vasculitis need this drug because older drugs that have been used to treat the disease, mainly immunosuppressants and steroids, have severe side effects, he said. As part of Amgen, the drug can leverage the pharmaceutical giant’s connections with prescribers.

“Decades of leadership in immunology and nephrology will allow us to add value to the launch of Tavneos, reaching many more patients and much faster than would otherwise be possible,” said Broadway.

In ANCA-associated vasculitis, white blood cells called neutrophils attack blood vessels and cause inflammation. The disease develops when a part of the immune system called the complement system is impaired. Tavneos is a small molecule designed to block a pro-inflammatory component of the complement system found in neutrophils. In his Annual Report 2021, ChemoCentryx said its drug appears to offer a more targeted approach than Soliris and Ultomiris, both blockbuster antibody drugs from AstraZeneca that target the complement system to treat other disorders. This targeted effect may reduce the risk of infections, although 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 AstraZeneca’s products, executives are not saying so directly. But Tavneos offers a “pipeline-in-product” option. In addition to its approved use in ANCA-associated vasculitis, Mountain View, Calif.-based ChemoCentryx has reached mid-stage testing of the drug in hidradentis suppurativa, a chronic inflammatory skin disease whose current treatment includes biologics. Preliminary data from a phase 2 trial showed the drug did not meet the main goal in the overall study population, although the company said it had positive results in a subset of patients. Initiation of a phase 3 study in patients with severe hidradentis suppurativa is contingent on feedback from the FDA, ChemoCentryx said in its financial filings. The company also has Phase 2 data for Tavneos in complement 3 glomerulopathy, a rare kidney disease with no FDA-approved therapies.

Lupus nephritis, an autoimmune kidney disease whose current treatment options include biologics, is another disease target for Tavneos. ChemoCentryx said it expects to begin clinical trials for 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 that its small-molecule approach to traditionally biological targets can also be applied to cancer. Some of the best-selling cancer immunotherapies belong to a class of drugs called checkpoint inhibitors. These antibody drugs block proteins that cancer uses to evade the immune system. ChemoCentryx’s CCX559 is an orally administered small molecule that targets checkpoint proteins. This drug may provide an alternative to currently available checkpoint inhibitors, large-molecule drugs that are dosed as infusions. CCX559 is in Phase 1 testing.

David Rees, Amgen’s executive vice president, research and development, acknowledged the clinical studies ChemoCentryx has conducted with Tavneos in additional indications. He said Amgen and ChemoCentryx will look at the data to develop the best way forward to tackle diseases that have few effective therapies. Amgen executives have not discussed the other drug candidates in the ChemoCentryx pipeline.

Amgen has been an active acquirer recently. Otezla was purchased by 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 biotech Five Prime Therapeutics. Months later, Amgen agreed to pay $400 million upfront for global rights, excluding Japan, to an antibody to Kyowa Kirwin in development for atopic dermatitis. In June, Amgen has struck a $900 million deal to acquire antibody drug developer Teneobio.

For ChemoCentryx, Amgen is paying $52 in cash for each share of the biotech, a more than 115% premium to the stock’s closing price on Wednesday. The deal values ​​ChemoCentryx at $3.7 billion.

The boards of directors of both companies have approved the transaction, which the companies expect to close in the fourth quarter of this year. The merger agreement prohibits ChemoCentryx from soliciting other offers or even engaging in negotiations with other parties regarding another offer. If ChemoCentryx violates that provision or if an unsolicited superior bid occurs and the biotech terminates the deal with Amgen, it must pay a termination fee of $119 million, according to the merger agreement.

Photo: mikdem, Getty Images

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