Amgen isn't buying Onyx for their research staff, or any of their people at all. As that Bloomberg story linked to above has it, "Amgen to Buy Onyx for $10.4 Billion to Gain Cancer Drug".
That's Kyprolis (carfilzomib), their proteasome inhibitor, and that's all they need from Onyx, who bought the compound anyway when they acquired Proteolix a few years ago. So since I don't want to be a downer either, especially on Monday morning, I'd be interested to see if anyone can make another case...
I'd add that this represents two trends in pharma these days: endless agglomeration and oncophilia.
The serial mergers, like this one, are meant to plug holes in research pipelines. They do that -- but 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.
The other trend is piling into cancer drugs, because you can charge a lot of money for modest results. For example, Kyprolis was approved because slightly fewer than 25 percent of the refractory multiple myeloma patients who received it had at least a partial response to the drug; the median duration of that response was just under 8 months. It costs $10,000 a month.
Higher cost doesn't necessarily mean you make more money. Lipitor is one of the biggest blockbuster drugs in history, even though a month's dose went for a tiny fraction of Kyprolis's cost, because millions and millions of people took it. The problem for a statin developer now is twofold: millions of people are taking Lipitor (or Crestor, or another statin), so your new product faces stiff competition, and regulators will demand to see better efficacy, or side effects, or dosing schedules, than whatever is already on the market. On the other hand, we don't have very good treatments for cancer, so your drug that produces modest improvement has a much better chance of getting approved -- and purchased.
The merger, then, may be good news for Amgen. But what it tells us about the state of drug development is not happy.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Megan McArdle at email@example.com