8-KMaterial Agreements

AMGEN INC 8-K Report, Material Agreement (Sep 29, 2006)

Filed September 29, 2006For Securities:AMGN

Summary

Amgen Inc. (AMGN) announced on September 28, 2006, that it has entered into a definitive agreement to acquire Avidia, Inc. through a merger. This strategic acquisition aims to bolster Amgen's pipeline and expand its capabilities. The transaction involves an up-front cash payment of approximately $360 million, which is expected to be around $290 million net of Avidia's cash, certain expenses, and Amgen's existing equity stake. In addition to the upfront payment, Amgen may also make two future contingent payments totaling $90 million, dependent on the achievement of specific development milestones for Avidia's compounds. The acquisition structure includes provisions for the treatment of Avidia's outstanding stock options and other equity awards, with vested options receiving cash and unvested options converting to Amgen equity awards. This deal represents a significant investment by Amgen to enhance its product development efforts and long-term growth prospects.

Key Highlights

  • 1Amgen Inc. has entered into an Agreement and Plan of Merger to acquire Avidia, Inc.
  • 2The total consideration includes an up-front cash payment of approximately $360 million.
  • 3Net up-front payment is expected to be around $290 million after adjustments for Avidia's cash and transaction costs.
  • 4Two contingent payments totaling $90 million may be made upon achievement of specific development milestones.
  • 5Vested Avidia stock options will receive cash consideration; unvested options will be converted into Amgen equity awards.
  • 6The Boards of Directors of both Amgen and Avidia have unanimously approved the merger agreement.
  • 7The transaction is subject to customary closing conditions, including regulatory approvals.

Frequently Asked Questions

The acquisition of Avidia, Inc. is intended to enhance Amgen's pipeline and expand its capabilities, likely by integrating Avidia's technology, research, or product candidates into Amgen's development programs.

Amgen is paying an up-front cash amount of approximately $360 million, with an expected net payment of around $290 million after accounting for Avidia's cash, transaction expenses, and Amgen's existing stake. Additionally, there are potential contingent payments of up to $90 million tied to development milestones.

Holders of vested Avidia stock options will receive their pro-rata share of the up-front and contingent payments in cash. Holders of unvested options will receive Amgen options and Amgen restricted stock units, reflecting their pro-rata portion of the respective payments.

The merger is subject to standard closing conditions, including obtaining necessary regulatory approvals (such as under the Hart-Scott Rodino Act) and ensuring no material adverse effect has occurred with respect to Avidia.