Biotech Values

[DewDiligence]

Amgen to Acquire Abgenix for $22.50 Per Share

[CC at 5:00 p.m. ET. p.s. PGS: yes, the Pani results in the "408" trial are rock solid, despite the attempt of IMCL cheeleaders to disparage them. Results from the PACCE trial are still unkown and are due out any day.]

http://biz.yahoo.com/prnews/051214/sfw095.html?.v=32

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Wednesday December 14, 4:06 pm ET

Provides Amgen With Full Ownership of Panitumumab and Eliminates a Denosumab Royalty

$0.05 to $0.10 Dilution of Adjusted Earnings Per Share in 2006 and 2007 Accretive Thereafter

THOUSAND OAKS, Calif. and FREMONT, Calif., Dec. 14 /PRNewswire-FirstCall/ -- Amgen (Nasdaq: AMGN - News), the world's largest biotechnology company, and Abgenix, Inc. (Nasdaq: ABGX - News), a company specializing in the discovery, development and manufacture of human therapeutic antibodies, today announced that they have signed a definitive merger agreement under which Amgen will acquire Abgenix for approximately $2.2 billion in cash plus the assumption of debt. Under the terms of the agreement, shareholders of Abgenix will receive $22.50 in cash per common share.

The acquisition of Abgenix provides Amgen with full ownership of one of its most important advanced pipeline products, panitumumab. Working closely with Abgenix under a co-development agreement that Amgen assumed as a result of its acquisition of Immunex Corporation in 2002, Amgen has led the development and commercialization strategy for panitumumab. The acquisition provides additional value to Amgen by eliminating a tiered royalty that Amgen would have paid to Abgenix on future sales of denosumab (formerly AMG 162), which was created using Abgenix's XenoMouse® antibody technology.

"Abgenix is a natural strategic fit for Amgen given our strong existing relationship. Amgen has been intimately involved in all aspects of the development and commercialization of panitumumab over the last few years, providing us with substantial and realistic insight into the value of, and significant opportunities for, this cancer therapeutic. This investment reflects Amgen's commitment to our pipeline and our growing confidence in the future success of both panitumumab and denosumab," said Kevin Sharer, president and chief executive officer of Amgen.

Amgen and Abgenix believe panitumumab has substantial commercial opportunity, including potential in the first-line treatment of metastatic colorectal cancer (CRC) in combination with other agents, including anti-angiogenic therapies. Panitumumab is the first epidermal growth factor receptor (EGFr) inhibitor to demonstrate a statistically significant improvement in progression-free survival for metastatic colorectal cancer patients who have failed standard chemotherapy. Panitumumab is also the first fully human monoclonal antibody in cancer clinical trials that targets the epidermal growth factor receptor. Amgen believes that potential peak worldwide sales for panitumumab could reach $2 billion or more, assuming success of panitumumab in several clinical trials evaluating multiple lines of therapy in colorectal cancer and head and neck cancer.

Later this week, Amgen and Abgenix expect to initiate a biologics license application (BLA) for the treatment of metastatic colorectal cancer patients who have failed standard chemotherapy. Panitumumab is Amgen's and Abgenix's most advanced cancer therapeutic and is a natural extension from Amgen's existing oncology supportive care franchise.

"Combining with Amgen provides an attractive valuation for our shareholders. We believe this transaction will allow us to advance panitumumab to its full potential for patients and to maximize the value of both Abgenix's growing portfolio of antibody product candidates and our exceptional scientific platform," said Bill Ringo, president and chief executive officer of Abgenix. "We have worked closely with Amgen for many years and are very excited about combining Abgenix with the leader in the biotech industry."

The transaction includes the Abgenix 100,000 square foot manufacturing plant in Fremont, Calif., which will produce panitumumab and add to Amgen's protein manufacturing capabilities. Abgenix also brings scientific knowledge and assets, such as the ownership and capabilities of the proprietary fully human monoclonal antibody technology, XenoMouse.

Transaction Terms

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Amgen will pay shareholders of Abgenix $22.50 in cash per common share for a total value of approximately $2.2 billion and will assume Abgenix outstanding debt. The acquisition is subject to the approvals of Abgenix's shareholders and regulatory authorities, and to other customary closing conditions. The transaction is expected to be completed by the end of the first quarter of 2006. Funds will be provided from Amgen's cash on hand at the time of closing.

Amgen expects dilution of adjusted earnings per share in 2006 and 2007 in the range of $0.05 to $0.10, with impact to adjusted earnings per share expected to be accretive thereafter, assuming commercial success of panitumumab.

Amgen expects to retain substantially all of the Abgenix manufacturing employees. Amgen and Abgenix will be reviewing ongoing business needs and opportunities at Amgen with Abgenix's employees in the coming months.

Conference Call and Webcast Information

Amgen and Abgenix will host a conference call and webcast for investors and analysts today at 2:00 PM Pacific Time to discuss the transaction. Live audio of the conference call will be simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public.

To participate in the conference call, please dial 877-817-2450 (U.S. and Canada) or 706-634-7548 (international) fifteen minutes before start time. The pass code for the live call is 3416104. A telephonic replay of the call will be available by dialing 800-642-1687 (U.S. and Canada) or 706-645-9291 (international). The replay participant code is 3416104.

The webcast of the conference can be found on Amgen's Web site, www.amgen.com, under Investors, and on Abgenix's Web site, www.abgenix.com. The webcast will be archived and available for replay at least 72 hours after the event.

About Panitumumab

Co-developed by Amgen and Abgenix, panitumumab is the first fully human monoclonal antibody that targets the epidermal growth factor receptor (EGFr), a protein that plays an important role in cancer cell signaling. Panitumumab, an IgG2 monoclonal antibody, binds with high affinity to the EGFr. Panitumumab was generated with Abgenix's XenoMouse®(1) technology, which creates a fully human monoclonal antibody that contains no murine (mouse) protein. The body's immune system can recognize the mouse protein found in chimeric antibodies as foreign and launches an immune response in the form of infusion reactions, allergic reactions or anaphylaxis. The goal of developing fully human monoclonal antibodies, which by definition contain no mouse protein, is to offer effective, high affinity therapies that minimize the potential for this type of immune response. Panitumumab is being evaluated in clinical trials as both a monotherapy and in combination with other agents for the treatment of various types of cancer, including colorectal, lung and kidney.

About Denosumab

Denosumab is designed to target RANK Ligand, a protein that acts as the primary signal to promote bone removal. Preclinical models have demonstrated that inhibiting RANK Ligand leads to improvements in cortical and trabecular bone density, volume and strength. Denosumab is currently being studied for its potential in the treatment of a broad range of bone loss conditions including osteoporosis, treatment induced bone loss, bone metastases, multiple myeloma, and rheumatoid arthritis.
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