Amgen to Buy Cancer Drug and Up to $2 Billion in Own Stock

Amgen Inc. in Thousand Oaks, the world’s largest biotechnology company, said it will buy Immunomedics Inc.’s epratuzumab, an experimental antibody treatment for non-Hodgkin’s lymphoma, to build up its pipeline of cancer drugs.

The company also announced it will buy back as much as $2 billion in stock over the next two years.

Amgen has been buying back about $1 billion of its stock a year, and the new program continues that plan, Amgen spokesman David Kaye said. The move comes amid a 52% rise in Amgen shares over the last 12 months.

Amgen will pay Immunomedics, which develops cancer treatments, $18 million plus royalties, and clinical research milestone payments potentially worth $65 million.

In addition, Amgen will make one-time milestone payments totaling as much as $225 million, if and when the drug has sales of $1 billion. Amgen also will make payments to Immunomedics for each second-generation product it develops that is based on epratuzumab.

“While it’s too early to tell whether this will be a significant revenue driver for Amgen, they’re at a stage of development where they’re looking for . . . not just $200-million drugs, but $400-million-plus drugs,” said Eric Schmidt, an analyst with SG Cowen.

Epratuzumab is being studied in patients who don’t respond to Rituxan, the current antibody for non-Hodgkin’s lymphoma. There are about 300,000 Americans with non-Hodgkin’s lymphoma, a cancer of the lymphatic system.