Amgen will acquire Micromet, Inc., a biopharma known for its Bispecific T cell Engager (BiTE) antibody platform that can redirect the immune system to fight tumor cells, gaining a promising Phase II asset, several earlier-stage partnered assets, and a validated technology platform that could have broad applications in a range of hematologic malignancies and solid tumors.

Amgen announced plans to acquire the Rockville, Md. headquartered biopharma for roughly $1.16 billion, or $11 per share, in cash on Jan. 26. The price represents a 33% premium over Micromet’s $8.28 closing price on Jan. 25. It also represents a historic high for the company, which went public in 2006 through a reverse merger with CancerVax.

Mircomet’s lead asset is blinatumomab, a BiTE antibody targeting CD19 in Phase II clinical development for acute lymphoblastic leukemia (ALL) and in Phase I testing for non-Hodgkin’s lymphoma. The antibody has shown early promise in clinical testing, but it has also been associated with central nervous system adverse events and its path to market remains far from clear. The rest of the company’s portfolio is in earlier stages of development – and much of it is partnered. The company’s other wholly-owned asset, MT110, targeting EpCAM – a protein found on the surface of most solid tumors – is in early clinical testing for solid tumors.

For Amgen, the acquisition moves the biotech further into hard-to-treat cancers, an area where it says it wants to play, bolstering its near-term pipeline and potentially offering a broader platform, which could be the basis for a “new set of tumor and other indications,” said EVP, R&D Roger Perlmutter, on an earnings call with analysts on Jan. 26. Executives said the deal was part of a long-term strategy to move from supportive care in oncology to therapies by building expertise in several approaches to killing cancer cells. Micromet’s assets also will fit well with Amgen’s historic strength in hematology through its anemia franchise, an area facing increased commercial pressures.

To date, the company doesn’t have many mid- to late-stage oncology assets. AMG 386, an angiopoetin 1 and 2 inhibitor for ovarian cancer and the insulin growth factor-1 receptor antagonist ganitumab for pancreatic cancer are both in Phase III testing. A Phase III trial studying the VEGF inhibitor motesanib in non-small cell lung cancer failed last year. Almost exactly a year ago, the company acquired Biovex, Inc. for $425 million in cash upfront and up to $575 million in additional milestones, gaining another Phase III asset, a cancer vaccine for metastatic melanoma and head and neck cancers Also see "Amgen Takes Out Cancer Vaccine Developer BioVex In Potential $1B Deal" - Pink Sheet, 24 January, 2011..

From Partner To Acquirer

“We have been interested in Micromet for a long time, basically since the company was started,” Perlmutter said in an interview. “Redirected lysis has been a popular idea among those of us who would like to see immunotherapy for cancer, but it is extremely difficult to get it to work, and what Micromet has done is they have gotten it to work.” Micromet’s BiTE antibodies mobilize T cells to engage with otherwise unrecognizable tumor cells and deliver a powerful cytotoxic to the tumor cells and kill them via apoptosis.

Amgen has already demonstrated its interest in Micromet through an earlier R&D partnership focused on the solid tumor space. Under that agreement, Amgen paid $14 million upfront to develop three solid tumor targets using Micromet’s proprietary platform Also see "Micromet Gets $14M Upfront From Amgen For BiTE Technology" - Pink Sheet, 11 July, 2011..

Since then, Micromet gained some clarity from FDA on the path forward for blinatumomab in B-precursor relapsed/refractory acute lymphoblastic leukemia. Following a meeting with FDA, the company initiated a single-arm Phase II clinical study enrolling approximately 65 patients in November. The primary endpoints of the study – which could serve as a basis for an accelerated review if the results are compelling – are complete remission and complete remission with only partial recovery of blood counts (CRh). Secondary endpoints include duration of response and overall survival.

In December, the company presented positive data from a small Phase II trial at the American Society of Hematology annual meeting showing that blinatumomab more than doubled the complete remission rate produced by current standard therapies in patients with relapsed/refractory B-precursor ALL. In the trial, 68% of evaluable patients (17 of 25) across all doses and schedules achieved CR or CRh. “It was really quite remarkable in that patient population,” Perlmutter said of the data results. “The therapy is very active. It is active because you have been able to redirect cytotoxic T lymphocytes to kill tumor cells, and there is every reason to believe that beyond this rare asset, the platform will be generalized to other tumor targets.”

Nonetheless, the drug is a powerful cytotoxic and has been associated with adverse events, including central nervous system and cytokine release syndrome events that have led to discontinuation. But both appear to be reversible and thus will not pose “terrible impediments” to treatment, Perlmutter said.

A New R&D Center Of Excellence In Germany

Amgen intends to keep Micromet’s research center located in Munich, Germany, where the company was founded in 1993 by a small team of scientists from the University of Munich. The site will operate as an Amgen R&D center of excellence, the firm said, noting that Amgen’s existing operations in Germany will likely be consolidated there. Micromet employs 203 in the Munich site and 32 in Rockville.

“There’s no doubt that [Chief Scientific Officer] Patrick Baeuerle and his colleagues have assembled a very gifted team of scientists in Germany that are committed to seeing this BiTE platform come to fruition,” Perlmutter said. “We don’t want to do anything to disrupt that.”

Micromet’s BiTE partners

Medimmune in GI cancers

Bayer Healthcare in prostate cancer

Sanofi in carcinomas

Boehringer Ingelheim in multiple myeloma

As for Micromet’s existing partners, Amgen said it is committed to maintaining those relationships. Micromet had several development partners for its BiTE antibodies, including Medimmune (Phase I in gastrointestinal cancers), Bayer Healthcare (preclinical in prostate cancer), Sanofi (preclinical in carcinomas), Boehringer Ingelheim (preclinical in multiple myeloma). Amgen stands to receive millions of dollars in milestone payments and royalties if any of those drugs should progress through the clinic and onto the market. The partnership with the largest potential earn-outs is with Sanofi, which paid $12 million upfront and offered $243 million in milestones in a 2009 deal [See Deal].

Future out-licensing opportunities could also be on the table. “While we have what we think are a lot of good ideas with respect to how to use the BiTE platform, there are a lot of other smart people in the world who have other ideas, and we do not want to exclude other people from being to employ BiTE technology in order to further their programs,” Perlmutter said.

Amgen’s move to acquire Micromet comes about three years after a pre-existing partnership between Micromet and AstraZeneca PLC’s MedImmune dissolved. Micromet and MedImmune were partnered on development of blinatumomab dating back to 2003, but MedImmune backed out of the collaboration in 2009 and Micromet re-acquired full commercial rights to the drug Also see "Micromet Reacquires Full North American Rights To Blinatumomab" - Pink Sheet, 5 November, 2009.. That opened the door for another acquirer to step in.

Analysts were largely receptive to the acquisition. “We see this as a worthwhile acquisition for Amgen because it further bolsters the company’s oncology R&D efforts (and existing BiTE partnership), but also leverages the massive reach Amgen has in the hem-onc community via sales of Aranesp, Neupogen, Neulasta and Xgeva,” UBS analyst Matthew Roden said in a same-day research note.

“We believe the acquisition makes strategic sense,” said JP Morgan’s Geoff Meacham. “In our view, it’s a small deal that shouldn’t move the dial for free cash flow,” he added.

Amgen Gobbles Up Micromet In $1.16 Billion BiTE

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