AMGEN'S ACQUISITION OF ABGENIX: THE EXPECTED SYNERGIES

"Amgen, the world's largest biotechnology company, completed the acquisition of Abgenix, Inc, for US$22.50 in cash per share of common stock, a 54 percent premium over Abgenix's last closing price. The acquisition of Abgenix provided Amgen with full ownership of one of its most important pipeline products, 'Panitumumab'. Panitumumab was their most advanced cancer therapeutic and was a natural extension from Amgen's existing oncology supportive care franchise. The acquisition also eliminated a royalty that Amgen would have paid to Abgenix on future sales of Denosumab. Some analysts believed it to be a right move, as of the end of September, Amgen had over US$5.5 billion in cash and was generating over US$1 billion in free cash flow per quarter, but others were sceptical about the high expected sales figure of panitumumab. This case deals with the acquisition of Abgenix by Amgen. It provides a brief overview about the two companies and highlights Amgen's focus on the oncology segment. This is followed by a brief overview of the biotechnology sector and the global cancer drug market. The case also deals with the expected synergies and possible challenges that will result from the acquisition. http://www.ecch.com/casesearch/advanced_search.cfm"