Biotech Company Amgen Buys Out Gene-Hunting Firm
Lee Rannals for redOrbit.com – Your Universe Online
Amgen, a giant biotechnology company, said it plans to pay $415 million to acquire a gene-hunting company.
Amgen said on Monday it plans to purchase deCODE Genetics, a company based in Iceland and known for discoveries such as finding that the genetic nature of human disease was far more complex than thought.
The two companies hope the deal will be symbolic, as deCODE receives a well-financed partner, and Amgen capitalizes on new research brought on by the gene-hunting business.
DeCODE studied the local population in Iceland to identify genetic variations linked to schizophrenia, cancer and other diseases. In the past year, the company published a study identifying a rare mutation that protects people from getting Alzheimer’s disease.
DeCODE has had trouble building a sustainable business, and filed for bankruptcy protection back in 2009. The company was bought out of bankruptcy in 2010 by Saga Investments. An issue for the gene-hunting company has been finding a way for it to make money from its discoveries.
Amgen, the world’s largest independent biotechnology company, said it can use deCODE’s findings and technology to its advantage, according to a report by the New York Times.
The Times wrote that Dr. Sean Harper, Amgen´s executive vice president for research and development, said drugs based on human genetic discoveries have a better track record than those based on animal studies.
“This is a magical moment when it comes to the possibility of utilizing genetics,” Kari Stefansson, Amgen’s chief executive officer, told Business Week. “I have been dreaming of a moment when we can have an impact on health care through genetics.”
The transaction doesn’t require regulatory approval, and is expected to be completed by the end of the year.
Amgen acquired Micromet Inc earlier this year for $1.16 billion, helping it to add an experimental leukemia drug to its repertoire.
Eric Schmidt, an analyst with Cowen & Co., wrote to Business Week and said that it is way too early to know whether things will work out in favor of the companies. He added that the answer to that may come in 10 years from now.