Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016.
Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.
The U.S. company announced a recommended public cash offer to Nuevolution shareholders to tender their shares for 32.5 Swedish kronas ($3.37) each in cash.
The offer represents a 169-percent premium over Nuevolution's Tuesday closing price.
Nuevolution's shares are listed on the Nasdaq Stockholm exchange.
The target company's board has unanimously recommended Amgen's cash tender offer to its shareholders.
Institutional investors that own a combined 59 percent of the total number of shares and votes in Nuevolution have given their commitment to subscribe to the tender offer, subject to certain conditions, Amgen said.
Amgen said it will fully finance the deal with cash on hand.
Why It's Important
Nuevolution is a small-molecule drug discovery platform biotech that has partnerships with pharma and biotech companies, with its internal programs focusing on inflammation, oncology and immuno-oncology.
Its proprietary Chemtics platform provides access to screening billions of molecules and efficient optimization of drug properties to identify drug candidates.
Amgen and Nuevolution have had an ongoing multitarget collaboration partnership since October 2016. Amgen said it's exercised its contractual opt-in right for the first two cancer programs under this partnership.
"A business combination of Amgen and Nuevolution will enable a closer integration of Nuevolution's technology and drug discovery expertise with Amgen's experience and capabilities in research and development, manufacturing and commercialization," the Thousand Oaks, California-based company said in a press release.
If Amgen succeeds in buying out more than 90 percent of Nuevolution shares, the company said it will initiate a compulsory acquisition procedure to buy out the remaining shares under the Swedish Companies Act.
Amgen shares were down 0.28 percent at $169.21 at the time of publication Wednesday.
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