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Amgen Inc. (NASDAQ:AMGN) Announces The Purchase of Immunology Drug Otezla from Celgene Corporation (NASDAQ:CELG)

Amgen Inc. (NASDAQ:AMGN) has announced the purchase of Celgene Corporation’s (NASDAQ:CELG) leading immunology drug Otezla for around $13.4 billion.

Otezla purchase deal to be finalized at the end of the year

The company has indicated that the deal will be closed at the end of the year. Following the announcement, Amgen’s stock gained 2.85% to close the session at $204.75. The gain in stock despite the amount offered for Otezla being a huge sum demonstrates investor optimism for the move.

Amgen has already cemented its foothold in the immunology space with its drug, Enbrel. Equally, the company has launched Amgevita in some European markets. Amgevita is biologically similar to AbbVie Inc.’s (NYSE:ABBV) Humira. Investors are optimistic that the company will leverage its potential in the immunology space to advance the revenue trajectory for Otezla.

Investors are, however, wary about the possibility of a deal between Amgen and Alexion Pharmaceuticals Inc. (NASDAQ:ALXN). This is because Amgen committed a significant amount of money to acquire Otezla, which has made the possibility of another big deal unlikely.

Otezla to boost Amgen revenues

The purchase of Otezla will be accretive to the company’s revenues as well as non-GAAP EPS immediately after finalizing the deal. Otezla is expected to generate revenues of around $1.9 billion this year. The company has predicted two double-digit YoY sales growth for the drug until 2024.

The drug will also strengthen the company’s market position in the US as well as internationally. So far the drug has received approval from the FDA for three indications and has already been approved in 54 countries.

The sale of Otezla by Celgene is of massive significance to the completion of a merger between Celgene and Bristol-Myers Squibb Co. (NYSE:BMY). The megamerger that was announced at the beginning of the year and in April, both companies shareholders approved the move.  However, in June Bristol-Myers Squibb reviewed the timeline of the completion of the merger to late 2019 or early 2020.

Published by Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at WallStreetPR.com recently due to my passion for the markets.

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