Amgen Inc. scheduled a conference call with investors this morning to announce it is buying Immunex Corp. of Seattle for approximately $16 billion in cash and stock, a deal that would marry the nation's largest biotechnology company with its fastest-rising star.
A source said negotiations were concluded successfully over the weekend and an announcement will go out before the stock market opens this morning. The source, who was not directly involved in the negotiations but had secondhand knowledge, did not know the exact mix of cash and stock in the deal but said the cash portion would be less than 20 percent.
The deal includes the 41 percent of Immunex owned by American Home Products Corp., a stake valued at more than $6 billion. The deal may raise some antitrust concerns because Immunex sells a minor drug that competes with one of Amgen's drugs. The deal requires approval from shareholders.
Wall Street has reacted skeptically to the idea of an Amgen buyout of Immunex, with the big company's shares falling 13 percent last week on news of buyout talks. Pushing the deal through will be a major sales job for Kevin Sharer, Amgen's chief executive. The main prize for Amgen, of Thousand Oaks, Calif., is an Immunex drug called Enbrel, whose sales could exceed $3 billion by 2005, equal to the combined sales of Amgen's two biggest drugs. 
The source said Amgen was likely to keep most of Immunex's1,500 employees, effectively turning the Seattle company into a branch research laboratory. It was unclear last night whether the deal transfers to Amgen any of the rights held by American Home Products Corp. to market Immunex drugs. If it does not, Amgen and AHP, of Madison, N.J., would likely wind up as business partners.
The deal is by far the biggest move to date for Sharer, who took charge of Amgen in mid-2000 with a mandate to shake up the company. Amgen has grown into a biotechnology powerhouse on the strength of two drugs, Epogen, for anemia related to kidney failure, and Neupogen, for cancer complications, but has not delivered a major new product in recent years. 
Amgen recently won approval to sell Aranesp, a replacement for Epogen, but some of the company's most ambitious research plans have yielded little. In particular, Amgen paid millions for rights to a protein called leptin that may play a role in regulating body weight, but research has not yielded much promise for leptin as a fat-busting drug.
Immunex has had some notable product failures, too, but Enbrel, an injectable drug used to treat rheumatoid arthritis, has been a roaring success. The drug has sharply improved the lives of many debilitated arthritis patients for whom all other treatments had failed, and patients have clamored for it even at $12,000 a year per person. Revenues from the drug could hit $750 million this year.
The source said the deal was seen as a strategic marriage that will help both companies accomplish their goals faster. Sharer is betting he can beat Wall Street's projections for Enbrel sales, while Immunex executives are excited about the prospect that Amgen's resources will let them bring some new drugs to market faster, the source said.