Archive for August 2014

Despite New Onyx Drug, Amgen Performs Below Predictions

August 21, 2014

Amgen logo pic Last fall, Amgen Inc. made waves in the biotech industry by purchasing Onyx Pharmaceuticals Inc. for $10.4 billion. The deal came after Onyx turned down the company’s initial $10 billion offer in June 2013. In its first quarter since purchasing the biotech start-up, Amgen reported lower-than-forecasted earnings. Although sales increased from the same period in 2013, the pharmaceutical giant’s revenues fell $230 million short of estimates. The company attributes the gap primarily to a drop in sales of Enbrel, an anti-inflammatory drug. Meanwhile, analysis shows that Onyx’s multiple myeloma drug, Kyprolis, generated $68 million, and drugs such as Xgeva and Prolia helped drive sales growth by approximately 5 percent.

Despite the fact that Kyprolis contributed $68 million to the company’s bottom line, the purchase of Onyx also affected Amgen’s first-quarter earnings. According to officials, research and development costs increased by more than 15 percent during the quarter as Amgen integrated Onyx’s existing programs. Although Amgen may see some slowed growth as a result of the growing biosimilar market, analysts predict that Kyprolis could hit peak sales of $2.4 billion in five years.

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Maintaining Research Continuity during Mergers and Acquisitions

August 4, 2014

Biotech pic In the wake of the recent merger proposal that Pfizer, Inc., submitted to AstraZeneca PLC, experts have weighed in on how massive pharmaceutical mergers can affect ongoing research and development. These critics point out that when large companies combine, research and development teams often experience detrimental personnel reductions. They argue that some of the most successful biotechnology start-ups have placed significant emphasis on keeping research teams intact even when they are bought out by larger companies. This is especially important given that many of today’s most innovative drugs require knowledge of an increasingly discrete set of novel biological targets.

Interestingly, most successful biotech companies end up discovering drugs that treat illnesses other than those they initially set out to treat. For example, although Genentech launched with the aim of developing drugs for heart disease, the company’s scientists ultimately produced pioneering new cancer drugs. Team continuity is crucial to these sorts of innovations, and large pharmaceutical companies can certainly learn from the lessons offered by biotech start-ups, especially when large mergers are on the table.