Amgen-Immunex Deal Rumored
Talk of a deal between the two biotech firms hit Wall Street early Thursday morning, driving shares of Immunex up about 10%. The rumors were then given more credence by a later CNBC report that says the companies are in advanced merger talks. Amgen is reportedly offering to buy Immunex for a price in the low $30 range. One possible snag: American Home Products (AHP) owns 41% of Immunex and if reports are correct, may have marketing rights to future drugs.
Shares of Immunex jumped $3.04, or 12%, to $27.49 a share in recent trading. Amgen is off $2.75, or 4%, to $61.65.
The deal, if consummated, is risky for Amgen because it would be dilutive to earnings over the next few years, which would force it to restate current growth estimates. The big attraction at Immunex is its rheumatoid arthritis drug, Enbrel, which is expected to rack up 2001 sales of about $750 million. But Enbrel sales growth has been constrained by a lack of the drug's supply, and there is significant competition on the horizon from rival drugs. Immunex also has a weak late-stage drug pipeline.On the positive side, Amgen recently received Food and Drug Administration approval for its own rheumatoid arthritis drug, dubbed Kineret. The company might be betting that it can create significant efficiencies by bringing the two drugs under the same roof. Neither company is commenting on the merger rumors.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV