Less than two days after Amgen Inc. said it was picking up a Phase II-stage drug for chronic kidney disease through the acquisition of Ilypsa Inc., the biotech giant announced plans to swallow another small biotech, Alantos Pharmaceuticals Inc., for $300 million cash.

Following the close of the deal, expected in the third quarter, privately held, Cambridge, Mass.-based Alantos will operate as a wholly owned subsidiary of Amgen, and Amgen, in turn, will gain rights to Alantos' lead product, a DPP-IV inhibitor in Phase IIa for Type II diabetes, as well as its matrix metalloproteinase-13 (MMP-13) inhibitor program in osteoarthritis. It's a transaction that helps diversify Amgen's pipeline and expand the company's limited foray into metabolic diseases, but like the Ilypsa deal, doesn't do much to offset threats looming over the company's EPO franchise.

Neither is "going to contribute to its top-line any time soon," analyst Eric Schmidt, of New York-based Cowen & Co, told BioWorld Today. He called this week's acquisitions "irrelevant to all the turmoil" relating to the use and risks of erythropoietin-stimulating agents (ESAs), which includes Amgen's top-selling Aranesp and Epogen.

Last week, the Thousand Oaks, Calif.-based firm responded to a proposal by the Center for Medicare & Medicaid Services to no longer pay for ESAs in certain cases of cancer and related neoplastic conditions. The CMS proposal could become final by the middle of August. So that's "still the primary concern for shareholders going forward," Schmidt said. (See BioWorld Today, May 16, 2007.)

Not surprisingly, news of the Alantos acquisition had little impact on Amgen's stock (NASDAQ:AMGN), which closed Wednesday at $57.29, down 32 cents.

But the deal is not without merit. It provides Amgen U.S. rights to ALS 2-0426, Alantos' second-generation inhibitor of the enzyme dipeptidyl peptidase IV (DPP-IV), an increasingly popular target in the Type II diabetes space, particularly since the approval of Merck & Co. Inc.'s Januvia last fall. Basel, Switzerland-based Novartis AG's Galvus was deemed approvable earlier this year, and other companies such as Waltham, Mass.-based Phenomix Corp. partners Santhera Pharmaceuticals AG, of Liestal, Switzerland, and Biovitrum AB, of Stockholm, Sweden, are among others with clinical and preclinical DPP-IV programs.

Designed to work by inactivating glucagon-like peptide-1, a mediator of blood glucose levels following meals, DPP-IV inhibitors have been shown to provide long-term improvement of glucose control without the accompanying risks of hypoglycemia and weight gain. And in light of recent safety concerns regarding thiazolidinediones, such as GlaxoSmithKline plc's Avandia, which the FDA recently noted showed a potential increase in cardiac risks based on trial data, there's a good chance DPP-IV inhibitors might gain a significant share of the market. Analyst Bret Holley wrote in a research note that CIBC World Markets believes "many physicians will switch to prescribing DPP-IV inhibitors," as they are a "potentially safer class of diabetes drugs with similar efficacy."

Though in early clinical development, Alantos' candidate already has picked up an overseas partner. French firm Les Laboratoires Servier licensed rights to the compound in October in exchange for up-front and milestone payments of up to $75 million. The two companies initiated Phase IIa testing of ALS 2-0426 last month. (See BioWorld Today, Oct. 25, 2006.)

Beyond its diabetes program, Alantos has an MMP-13 inhibitor candidate moving toward the clinic in osteoarthritis. That product is designed to slow and prevent cartilage degradation.

Since its founding in 1999, Alantos raised a total of $47 million in private financing, including a $20 million Series B round closed in March 2005. The company, which has facilities in Massachusetts and Heidelberg, Germany, employs 45 people.

Whether Amgen has further acquisition plans in its immediate future is unknown, though the company certainly has the cash, despite its $5 billion share repurchase program announced in December. Amgen ended the first quarter with about $4.8 billion in cash and marketable securities.

Its purchase of Santa Clara, Calif.-based Ilypsa, also scheduled to close in the third quarter, will cost the firm $420 million in cash. That deal provides Amgen with rights to ILY101, an oral nonabsorbed polymeric agent that has completed Phase II dose-ranging trials in chronic kidney disease patients, with results expected later this year. (See BioWorld Today, June 6, 2007.)

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