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Amgen deal may be first of many

June 05, 2007|Daniel Costello | Times Staff Writer

A buying spree may be underway at troubled Southern California biotech giant Amgen Inc.

After a difficult year during which sales of its key products fell in light of safety concerns, the company Monday acquired a privately held California company for $420 million in cash.

Ilypsa Inc. of Santa Clara doesn't yet have any drugs on the market, but its major candidate has shown promise in chronic kidney disease patients on dialysis, a growing and lucrative market.

Many analysts say the deal could be the first of many acquisitions for the Thousand Oaks-based biotech giant, which is seeing sales of its top-selling drugs fall dramatically amid increased scrutiny by regulators and researchers in recent months.

"They have no other choice but to buy new drugs right now, plain and simple," WBB Securities biotech analyst Steve Brozak said.

Several high-profile studies have raised questions about the safety of two of Amgen's top-selling drugs, Aranesp and its shorter-acting cousin Epogen, which treat anemia in more than a million cancer and dialysis patients a year. The drugs accounted for nearly half the company's revenue last year and 60% of its profit.

Doctors are significantly pulling back on prescriptions, and the federal Medicare program said last month that it probably would soon scale back on reimbursements for the drugs.

April data showed that sales of the biologics were down 16%, far more than anticipated.

Meanwhile, late last month, experts from the European Union's drug regulator recommended that the company's high-profile cancer drug Vectibix not be approved, dealing the company an unexpected blow.

The series of negative developments has increased pressure on Amgen to find more promising drug candidates.

Amgen has several high-profile drugs under development, including an osteoporosis treatment that has had impressive results in early clinical trials. But it isn't expected on the market for at least two years.

Ilypsa's principal experimental drug, known as ILY101, is designed to treat a condition common in kidney patients when too much phosphate remains in the blood.

The syndrome can result in pain and loss of bone mass, increasing the risk of fractures. Early studies suggest that the drug may work better than other medications currently on the market.

"Ilypsa and ILY101 are a strategic fit for Amgen [and] demonstrate our commitment to explore, develop and commercialize promising therapies that help in the fight against kidney disease and its complications," George J. Morrow, Amgen's executive vice president, said in a statement.

Shares of Amgen fell 3 cents to $56.91 before the deal was announced.

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