NEW YORK -- Amgen Inc (NASDAQ:AMGN), the world's largest biotechnology company, on Monday said it was buying smaller rival and leading arthritis drug maker Immunex Corp. (NASDAQ:IMNX) for $16 billion in cash and stock.
The merger would create a $72-billion biotechnology behemoth with added research strength and the financial muscle to buy late-stage development drugs from rival firms.
Amgen will pay about $30 per share for Seattle-bases Immunex. This represents around a 17 percent premium to Immunex's closing price on Friday, and a nearly 23 percent premium to the company's closing price on Wednesday, before word of the possible deal leaked out.
Amgen will also gain Immunex's drug Enbrel, a leading rheumatoid arthritis treatment, as well as several potential treatments for asthma and various forms of cancer.
Under the terms of the agreement, each Immunex common share will be exchanged for 0.44 shares of Amgen common stock and cash of $4.50, or a total of 85 percent in stock and 15 percent in cash.
FASTER GROWTH
"This is a compelling strategic transaction and an excellent opportunity for the shareholders, employees and partners of both companies, and we expect it will generate significant benefits for hundreds of thousands of patients around the world," Kevin Sharer, Amgen's chairman and chief executive officer, said in a statement.
As a result of the merger annual sales of Immunex's rheumatoid arthritis treatment Enbrel will likely reach $3 billion or more, he said.
"This acquisition will make Amgen a leader in the more than $10-billion potential inflammation market in biologics," Sharer added.
Amgen hopes to accelerate its five-year annual percentage sales growth rate to the low 30s from low 20s, the company said.
The company said it expects to post pro forma 2002 revenues of about $5.5 billion and net income above $1.5 billion. Amgen estimated cost synergies of more than $200 million in 2003 and more than $250 million in 2004.
