| This Biotech Buys a Generic Lifeline - Motley Fool |
|
Watch stocks you care aboutThe single, easiest way to keep track of all the stocks that matter... Your own personalized stock watchlist! It's a 100% FREE Motley Fool service... With its secondary hyperparathyroidism treatment, Sensipar, set to face generic competition in a few years, Amgen (Nasdaq: AMGN ) made the most obvious move to solve the problem. It bought a biotech developing a compound for the disease. Amgen is paying $315 million for KAI Pharmaceuticals -- entirely, it seems, for KAI-4169, which has completed phase 2 development. KAI had a partnership with Bristol-Myers Squibb (NYSE: BMY ) to develop a heart drug, but that appears to have died in development. Amgen wants to push KAI-4169 into phase 3 trials quickly, so it's lending KAI some money so the company can press on with trial planning before the deal closes. The fact that KAI needs a loan probably signals that it was a little desperate for a sale and that Amgen probably got a good deal. There's no doubt the KAI acquisition is a good fit. There's the obvious experience in selling Sensipar, which brought in more than $800 million last year. But secondary hyperparathyroidism is a hormone imbalance that is often caused by kidney failure, so it fits well with Amgen's anemia drugs. Follow-on compounds often struggle after the first-generation drug goes generic -- think Pfizer's (NYSE: PFE ) Pristiq and Johnson & Johnson's (NYSE: JNJ ) Invega competing against Effexor and Risperdal, respectively -- but KAI-4169 has one advantage because it'll be administered intravenously at the same time a patient is undergoing dialysis. Sensipar and Abbott Labs' (NYSE: ABT ) Zemplar, which is also approved for secondary hyperparathyroidism, are taken orally. Patients usually prefer popping pills to other methods, but not if you're already hooked up to a machine. The true sales potential for KAI-4169 will ultimately depend on the phase 3 efficacy data, so it'll be a while before we know whether the KAI acquisition was a good buy. But for now, it looks like a good move to combat the inevitable loss of Sensipar. Looking for a defensive play to hedge rising gas prices? Check out the Fool's free report, "3 Stocks for $100 Oil." Get yours free. <![CDATA[ <style type="text/css"> .eCapForUnregisteredUsersTestCell_eCapReplacement { background: none repeat scroll 0 0 #FFFFFF !important; border: medium none !important; } #content div.ecap, #content div.ecapReplacement { background: none repeat scroll 0 0 #FFFFFF !important; border: medium none !important; } #smalltext { font-size:11px; color:#666666; margin-top:0px; } ]]>The Steve Jobs Betrayal
|