Does This First-in-Class Acquisition Make Amgen a Buy?
Amgen (NASDAQ: AMGN) recently agreed to acquire biotechnology start-up Rodeo Therapeutics in an all-cash deal. Amgen will buy all outstanding shares of Rodeo for a total of $55 million. However, Rodeo stakeholders will be able to receive up to an additional $666 million in cash if certain milestones are met. For investors, the key questions are: How good is this deal for Amgen, and should you consider buying the stock now?
The California-based biotechnology giant made this purchase to expand its inflammation portfolio. It is Amgen's second acquisition of 2021 -- last month, it bought Five Prime Therapeutics for $1.9 billion. Through this deal, Amgen will get its hands on Rodeo's collection of assets targeting prostaglandins, a group of signaling molecules that play a role in tissue repair and regeneration. One drug that Amgen seems to have a lot of interest in is 15-prostaglandin dehydrogenase or 15-PDGH, which breaks down prostaglandins.
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Source Fool.com
