Amgen bids $167M to buy drug discovery shop Nuevolution

Amgen has offered $167 million (€150 million) to buy Nuevolution. The takeover will give Amgen control of a drug discovery platform that landed Nuevolution deals with leading companies plus a pipeline of early-stage cancer and inflammation programs.

Denmark’s Nuevolution made a name for itself over the past decade through a series of deals with major drugmakers including GlaxoSmithKline, Johnson & Johnson, Merck and Novartis. In parallel, Nuevolution began using its drug discovery platform to generate internal candidates against targets including RORγt, BET and IL-17A.   

Amgen struck an oncology and neuroscience drug discovery deal worth up to $410 million in 2016 and went on to exercise its rights to the first two cancer programs to result from the collaboration.

Now, Amgen has decided it wants more from Nuevolution than just the drugs covered by the deal. Amgen has persuaded Nuevolution’s board and major shareholders to support a takeout offer worth around $167 million. The bid represents a 169% premium over Nuevolution’s share price just prior to news of the deal and a 69% premium over its highest trading price over the past year. 

Amgen made the bid in the belief Nuevolution will “significantly expand” its “ability to discover novel small molecules against difficult-to-drug targets and with greater speed and efficiency,” senior vice president of global research Raymond Deshaies said in a statement.

Nuevolution’s ability to live up to that billing rests on its Chemetics drug discovery platform, which uses wet chemistry and molecular biology. Using the platform, Nuevolution synthesizes DNA-encoded small molecules and screens them for activity against targets. Amgen thinks the approach enables Nuevolution to quickly find candidates for hard-to-hit targets.   

At Nuevolution, a team well versed in Chemetics has worked to wring the most out of the system. Chief Scientific Officer Thomas Franch joined Nuevolution in 2001, and other members of the research team have spent more than 10 years at the company.

Amgen’s offer features provisions intended to keep the team together. In a decision it described as being driven by its “current knowledge of Nuevolution and in light of current market conditions,” Amgen has opted not to “change the composition of the management team and key employees” once the takeover goes through.

Rather, Amgen will offer all full-time Nuevolution employees a retention arrangement intended to motivate them to stay in their roles. Specifically, Amgen will pay sign-on compensation in the form of three years of cash and stock payments to employees who stick around after the deal closes. Amgen expects to pay up to $8.5 million under the arrangement.