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Amgen in deal for heart drugs

The biotech company buys a stake in Cytokinetics to gain access to its products.

January 04, 2007|From Reuters

Amgen Inc. and Cytokinetics Inc. said Wednesday that they would collaborate to develop drugs to treat heart failure in a deal that could yield smaller Cytokinetics more than $600 million if the products eventually succeed in clinical trials.

Shares of Cytokinetics rose 11.4% on news of its deal with Thousand Oaks-based Amgen, the world's largest biotechnology company that is best known for its drugs that treat anemia and boost immune systems of chemotherapy patients.

During the initial two-year term of the partnership, South San Francisco-based Cytokinetics will be obliged to conduct and pay for research of its compounds that have not yet reached clinical trials, as well as to finance its own continued development of a product called CK-1827452 that has completed two early-stage trials.

Cytokinetics is receiving an up-front fee of $42 million, the companies said. In addition, Amgen has purchased nearly 3.5 million Cytokinetics shares for $33 million. That translates into a price of $9.47 a share, or about 27% higher than Cytokinetics' Friday closing share price.

Heart failure is a hard-to-treat condition in which the heart -- damaged by clogged arteries or other causes -- is unable to adequately pump blood to the rest of the body. Few drugs are able to treat the life-threatening condition, which is a major cause of disability and hospitalizations among the elderly.

Cytokinetics is trying to develop synthetic drugs, including CK-1827452, that prompt weakened heart muscle to contract, by activating a family of proteins called myosins.

"Joint research activities will focus on identifying and characterizing activators of cardiac myosin as back-up and follow-on potential drug candidates to CK-1827452," the companies said.

Amgen has an option to help develop and sell CK-1827452, assuming the synthetic compound meets goals of planned mid-stage trials. Cytokinetics also may receive milestone payments of as much as $600 million on CK-1827452 and other products arising from the research as well as royalties, the companies said.

Shares of Cytokinetics gained 86 cents to close at $8.34. Amgen's shares rose 9 cents to $68.40.

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