Associated Press
Shares of Seattle-based Immunex Inc. jumped 10 percent Thursday on a report that Amgen Inc. was in talks to acquire it for at least $18 billion in cash and stock.
CNBC reported that Amgen, the world’s largest biotechnology company, was offering to buy Immunex for a share price in the low-$30 range.
Analysts cautioned, however, that consummation of any deal faces a major hurdle in health care giant American Home Products Corp., which owns a hefty stake in Immunex.
Investors bid up Immunex on the news, pushing shares up $2.51 to $26.96. Thousand Oaks, Calif.-based Amgen shares declined 6.5 percent, or $4.20, to $60.19. American Home rose 5 cents to $58.25.
American Home owns 41 percent of Immunex’s publicly traded stock and is the company’s biggest shareholder. The Madison, N.J.-based company also shares significantly in sales of Immunex’s rheumatoid arthritis drug Enbrel, which is expected to garner sales of about $750 million this year.
"American Home would certainly need some convincing," said analyst Dennis Harp of Deutsche Banc Alex. Brown Inc. in New York, adding that he doubted that could happen.
Immunex and American Home declined to comment on the report, while Amgen didn’t immediately return a phone call.
Amgen recently won Food and Drug Administration approval to sell its own rheumatoid arthritis drug, dubbed Kineret.
"There is a synergy in the two drugs and maybe they could be used in combination," said Fariba Ghodsian, an analyst with Roth Capital Partners in Los Angeles. "That may be part of the attraction for Amgen."
In the short term, though, Ghodsian said she feared such a deal would interfere with Amgen’s plan to grow earnings by 20 percent each year.
"A deal with Immunex would cut into that," Ghodsian said.
Sales of Enbrel are expected to be flat in 2002 because Immunex doesn’t have enough production capacity to meet demand. Immunex plans to open a new factory in West Greenwich, R.I., in the summer of 2002 to increase Enbrel’s production.
Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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