Amgen To Buy Onyx In $10.4 Billion Deal

There's been a major acquisition in the drug industry. Amgen Inc, the world's largest biotechnology company is buying Onyx Pharmaceuticals. The deal is valued at $10.4 billion. Amgen has high hopes for Onyx's cancer drugs.

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RENEE MONTAGNE, HOST:

NPR's business news starts with a major biotech deal.

Amgen, the world's largest biotech company, is buying Onyx Pharmaceuticals for nearly $10.5 billion.

As NPR's Wendy Kaufman reports, Amgen has high hopes for Onyx's cancer drugs.

WENDY KAUFMAN, BYLINE: Amgen has cancer-related medicines, but for the most part they relieve side effects of chemotherapy, they don't act on the cancer itself.

And analyst Mark Schoenebaum of the stock research firm ISI Group says Amgen wanted a piece of that action.

MARK SCHOENEBAUM: They can't rely forever on their current drugs which ease the side effects of chemotherapy because the long-term trends indicate that chemotherapy use is on the decline as new, more effective, more targeted, less toxic drugs take over for cancer therapy.

KAUFMAN: With this acquisition, the company gets among other drugs - one called Kyprolis, it's used to treat multiple myeloma - bone marrow cancer. Cancer drugs in general have become a huge part of the pharmaceutical industry and are expected to become the number one category for sales within five years.

Analyst Gene Mack of Brean Capital says the market for multiple myeloma drugs could be particularly strong. He believes Kyprolis could eventually be a major player in that market with annual sales of about $2 billion.

GENE MACK: That would be meaningful to anybody's income statement for sure.

KAUFMAN: Wall Street generally applauded Amgen's acquisition, but the deal comes with significant risks. For example, while Kyprolis has shown promise, it's not yet known how effective it will be over the long term, and the drug faces entrenched competition from other drug makers.

Wendy Kaufman, NPR News.

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