Amgen (AMGN) is a step closer to acquiring Micromet, Inc. (MITI) with the companies announcing the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976. Amgen and Micromet said that the waiting period was terminated on February 14, a few days before the scheduled date of Feb 17.
Amgen had announced its intention to acquire biotech company, Micromet, at the time of releasing its fourth quarter results in January 2012. The companies signed a definitive merger agreement under which Amgen will acquire Micromet for $11 per share in cash or approximately $1.16 billion. The deal has been approved by the Boards of both companies and is scheduled to close later this quarter. The tender offer will remain open until midnight at the end of March 1, 2012, unless the offer is extended.
With this acquisition, Amgen is looking to expand its oncology portfolio. The company will not only gain access to Micromet’s pipeline, it will also acquire Micromet’s proprietary BiTE (Bispecific T cell Engager) antibody technology. The lead candidate at Micromet is blinatumomab, a BiTE antibody, currently in phase II development for acute lymphoblastic leukemia (ALL). The candidate is also being developed for the treatment of non-Hodgkin’s lymphoma (NHL) and has the potential to be developed for other hematologic malignancies. Solitomab, another candidate in Micromet’s pipeline, is in phase I studies for patients with advanced solid tumors.
Outperform on Amgen
We currently have an Outperform recommendation on Amgen, which carries a Zacks #2 Rank (short-term “Buy” rating). The company’s guidance for 2012 was better-than-expected. Amgen is guiding towards earnings in the range of $5.90 – $6.15 per share on revenues of $16.1 – $16.5 billion. We are bullish on Prolia/Xgeva and we expect the company to utilize its cash towards share buybacks and acquisitions/deals that will help boost its pipeline and drive long-term growth.
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