Amgen on the acquisition trail
Big biotech superstar Amgen, Inc. (NASDAQ:AMGN) didn’t have the best week in biotech, but it still made investors happy, as shares gained nearly 5% over the past five days. Amgen, Inc. (NASDAQ:AMGN)’s hardly the kind of boom-or-bust stock that exemplifies this risk-fraught sector, but even this relatively stable pick can make waves. It’s rumored to be one of the contenders looking to acquire fellow biotech star stock Onyx Pharmaceuticals (NASDAQ:ONXX), according to sources in a report from Reuters released this week.
Would Onyx Pharmaceuticals (NASDAQ:ONXX) be a good fit for Amgen, Inc. (NASDAQ:AMGN)? Any acquisition won’t come cheap, considering Onyx’s $9.2 billion market cap, but Amgen’s one of the best and largest companies in the biotech business. Amgen’s built its success on the back of drugs such as anemia-fighting Aranesp and immunology blockbuster Enbrel, which posted more than $8 billion in total sales last year for Amgen, Inc. (NASDAQ:AMGN) and drug partner Pfizer Inc. (NYSE:PFE). Pfizer Inc. (NYSE:PFE)’s rumored to be competing for the Onyx Pharmaceuticals (NASDAQ:ONXX) acquisition as well, and Onyx’s lineup of cancer-fighting drugs — headlined by recently approved multiple myeloma therapy Kyprolis, which analysts have pegged at peak sales of between $1.5 billion and $2.5 billion — won’t turn away Amgen, Inc. (NASDAQ:AMGN) or its competitors looking for a revenue boost. Considering that Amgen, Inc. (NASDAQ:AMGN)’s exploring the melanoma market itself with developmental drug T-Vec, this acquisition would look good in the company’s portfolio indeed.
Idenix Pharmaceuticals Inc (NASDAQ:IDIX) also ranked among biotech’s top risers this week by gaining 6.5%. This stock’s suffered through a rough year, as shares have lost more than 25% year to date. That’s entirely due to the FDA’s request for more data on its hepatitis C therapy IDX20963, an event that by itself smashed the stock by more than 30% in late June — and shares have yet to recover. Idenix Pharmaceuticals Inc (NASDAQ:IDIX) dropped two other hepatitis C compounds earlier in the year, although the company’s still pursing mid-stage drug IDX719 in the all-oral hepatitis C pursuit.
That market could one day grow to more than $20 billion in annual sales, according to analysts. It’s tempting potential for Idenix and its competitors racing to develop the first all-oral drugs for this disease, but until Idenix Pharmaceuticals Inc (NASDAQ:IDIX) can show more progress, investors will have to be patient about gains.
Biotech’s known for volatility, and one of this year’s biggest booms suffered a hit on that end this week. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), which has seen shares explode for gains of more than 142% year to date in 2013, lost more than 11% this past week to rank as one of biotech’s biggest busts over the last five days.
Despite the drop, you shouldn’t be worried. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) was bound to retreat eventually, given the stock’s dramatic rise, and with little news out from the company this week, the shares’ fall is a result of profit-taking by opportunistic investors. However, it’s the long-term investors who could win out the most with this stock. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)’s ALN-TTRsc subcutaneous treatment for rare genetic disorder TTR amyloidosis has posted spectacular results in early stage trials, and while you’ll need to wait for later-stage data to be truly confident in the drug’s success, the data’s pointing in the right direction for this young biotech’s product.
The article Amgen’s Acquisition Ambition Leads Biotechs’ Rise originally appeared on Fool.com and is written by Dan Carroll.
Fool contributor Dan Carroll and The Motley Fool have no position in any of the stocks mentioned.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
