Amgen picks its moment to strike for Chemocentryx
The $3.7bn price is cheaper than it would have been last year, but Tavneos must still fulfill its pipeline-in-a-product potential.
Some investors had been concerned that the launch of Tavneos, Chemocentryx’s vasculitis therapy, would prove a damp squib. Amgen, it seems, has no such worries, today buying the company for $3.7bn, more than twice the target's market value.
This is perhaps not as expensive as it looks. The $52 a share Amgen paid may be a 116% premium to Chemocentryx’s closing price yesterday, but the smaller group had been trading at this level just over a year ago.
Amgen investors will therefore hope the company has managed to bag a bargain, but much will depend on whether Tavneos can expand beyond ANCA-associated vasculitis, an autoimmune disease that causes inflammation of small blood vessels.
Notably, Chemocentryx has also been evaluating Tavneos in hidradenitis suppurativa, C3 glomerulopathy and lupus nephritis; however, results in the former two indications have been mixed at best. Indeed, it was somewhat surprising that the drug got the nod in October for ANCA-associated vasculitis, given a split adcom vote and concerns about liver toxicity.
Tavneos sold $5.4m in the US in the first quarter of 2022, surpassing consensus sellside expectations of $3.8m, although it is too soon to label the launch a success. The drug is also approved in the EU and Japan, but Amgen will only gain the US sales; Kissei Pharmaceutical has the Japanese rights and Otsuka the Canadian, with all other territories being mopped up by Vifor.
It will now be up to Amgen to make Tavneos a success in the world's biggest drug market and justify Chemocentryx's price.
The product's NPV, as calculated by Evaluate Pharma and based on current sellside consensus, stands at just under $2bn. SVB analysts, meanwhile, see sales potential of over $2bn by 2030.
As for the rest of Chemocentryx's pipeline, CCX140, which had been in phase 2 for kidney disease, seems to have been quietly dropped as it does not appear in the company's latest update. There are also four other projects, including a PD-(L)1 inhibitor, listed.
|CCX140||CCR2||Ph2 in nephrotic syndrome and diabetic nephropathy; since abandoned?|
|CCX507||CCR9||Ph1 in ulcerative colitis|
|CCX559||PD-(L)1||Ph1 in unspecified cancer|
|CCX111||CCR6||Preclinical in TH17-driven disease|
|CCXTBD||CCR4||Preclinical in "other dermatological"|
|Source: company presentation.|
In any case, Tavneos is the main driver behind the deal. Chemocentryx previously said it would start two studies of avacopan in the second half of this year: a phase 3 in hidradenitis, despite the earlier miss, and a study in lupus nephritis, inspired by the renal function improvement seen in the phase 2 glomerulopathy trial.
In Tavneos, Amgen has got its hands on a much-needed growth driver. The group’s existing portfolio is facing a patent cliff, with several key products, including Enbrel and Otezla, due to lose exclusivity in 2025-30.
Tavneos’s US exclusivity could last until 2036 if patent extension is granted, according to SVB. Wringing the highest possible sales out of a drug has become an Amgen speciality, and the group will need all that expertise to justify today's outlay.