Amgen Got `Awesome Price' for Onyx: Brean's Mack

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Aug. 26 (Bloomberg) -- Dr. Celine Gounder, a primary care physician, and Brean Capital's Gene Mack discuss Amgen's purchase of Onyx Pharmaceuticals. They speak with Carol Massar on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Amgen going after a certain type of drug year.

Talk to us about this class of drug.

This particular drug we are talking about is a drug for refractory multiple myeloma.

Patients who have multiple myeloma, a rare disorder, who have retrieved that you have received treatment before but have relapsed.

There are a couple of other drugs in this category.

So there is some competition.

There is some competition.

It's one of a couple of different drugs in this category.

A pretty good market size.

You have 20,000 patients who get it per year.

11,000 of them died from multiple myeloma.

So it's about half of the total caseload.

It makes sense amgen was interested in what onyx had to offer.

Absolutely.

It pulls them into a leadership position and this market which analysts expect to double over the next five to 10 years great $10 billion sounds like a lot.

But you say they are paying -- i think they got a steal.

I think onyx's myeloma franchise is revenues close to $4 billion.

So more than the $3 billion number we've seen kicked around?

They have an oral medication which would be the key, in my view, to unlocking the full potential of the franchise.

That would give them a greater opportunity for diagnosis.

Anytime you can get somebody orally as opposed to an iv infusion, anything oral is going to be much easier for patients to take and tolerate greater -- to tolerate.

We've seen a lot of movement to introduce this class of drug.

In general, you see a lot of growth in cancer or oncology drugs.

We're the population is agency dated -- the population is aging.

We have had a few recently -- johnson & johnson required one in june.

Russell myers squib last year acquired one.

They are not cancer drugs, but the idea is to required -- to acquire a specific drug in their portfolio.

In those cases, it was hepatitis c and diabetes.

For amgen, did they need to do a deal like this?

I think they needed to and i think they were smart in the area they chose.

This is a class of patients that respond very well to medication.

Prior to the two keystone drugs used to treat myeloma, the overall prognosis was somewhere around two or three years and now it is out seven to 10 years.

The early drugs in the pipeline from companies are showing patients continue to respond to new agents.

So they have done deals to capture all of these stage assets and i think they have a keen focus on where the myeloma market can grow and i think this will be one of the largest oncology markets by revenue in three to five years.

These are drugs that will probably be used in combination.

There is a phase three trial looking at some older medications and steroids.

The phase three studies will give us more definitive information on how best to use these drugs and what combinations.

Could that mean a greater combinations can be utilized?

Possibly across product lines.

That's one of the reasons you might want some of the different combinations owned by the same companies because they give you leverage and potential.

Amgen did you shoot on this news.

You don't often see that from an acquirer acquirer.

But it made strategic sense.

Because it made strategic

This text has been automatically generated. It may not be 100% accurate.

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