In the pharmaceutical world, Amgen made some news when it bought Onyx Pharmaceuticals on Sunday, according to Reuters. The purchase was largely fueled by Amgen’s desire to make its way into oncology. It currently has drugs that deal with cancer symptons, but no successful drugs that treat cancerous tumors. With the purchase of Onyx, Amgen also acquired Kyprolis, a cancer drug that is just beginning to take off.
Amgen Inc paid $10.4 billion in cash to acquire Onyx, which makes the exchange the fifth-largest in biotech deal history. As well as wanting to make their way into oncology drugs, Amgen also wanted a new revenue stream to replace the four most profitable drugs with soon-expiring patents.
Bloomberg’s Megan McArdle takes this merger as a sign of of a sickening pharmaceutical industry. She states, “you can also make a plausible argument that the resulting megafirms have lower research productivity than multiple smaller firms, because mergers are traumatic, and you end up with so many layers of management between the chief executive officer and the research bench.”
She also notes why the company is looking to join the word of cancer treatment. According to McArdle, companies are able to charge large sums for a relatively small percentage of positive results. The drug Amgen just acquired, Kyprolis, costs $10,000 per month but just fewer than 25 percent of patients had a partial response to the drug.