Amgen Completes The Acquisition Of Five Prime Therapeutics

Amgen has completed the acquisition of the clinical-stage biotechnology company Five Prime Therapeutics. Amgen had previously announced a tender offer to buy all outstanding common stock at the price of $38.00 per share in cash. The aggregate payment that was to be made for the merger is $1.9B, excluding transaction expenses.

Amgen is a biotech company that focuses on unlocking biological potential and innovations that cater to patients suffering from serious illnesses. Amgen (AMGN) focuses on unmet needs in the human therapeutics field, and Five Prime Therapeutics (FPRX) will add to its overall oncology portfolio.

“Five Prime fits squarely within Amgen’s leading oncology portfolio and includes bemarituzumab, a Phase 3 trial-ready, first-in-class program for gastric cancer, the third leading cause of cancer mortality worldwide,” said Robert Bradway, Amgen’s Chairman and CEO.

He added, “Working with the dedicated professionals joining us from Five Prime, we plan to quickly move bemarituzumab into a Phase 3 study, bringing it one step closer to helping patients suffering from gastric cancer.” (See Amgen stock analysis on TipRanks)

Looking forward to the release of 1Q 2021 results, analyst Jay Olson of Oppenheimer & Co’s estimates total revenue of $6.1 billion versus the $6.3 billion consensus estimate. The revenue estimates reflect the continued impact of the pandemic expected in the first three quarters of 2021. Olson’s estimated EPS is $3.75 versus a consensus average of $3.70.

Olson emphasizes that “We anticipate emphasis on volume-driven sales growth following 15% y/y volume growth in FY20 despite challenges, and AMGN expects ~5% negative net price impact for FY21. We view conservative net pricing expectations as reasonable considering potential headwinds.”

The analyst maintains a Buy rating on the stock, with a price target of $275. This implies upside potential of 6.9% from current price levels.

Amgen scores a Moderate Buy consensus rating from the analyst community based on 8 Buys and 7 Holds. The average analyst price target of $261.08 implies that shares are almost fully priced with approximately 1% upside potential to current levels.

AMGN scores 8 out of 10 from TipRanks’ Smart Score rating system. This implies that the stock has the potential to beat market expectations.