Amgen, DaVita Reach New Sourcing And Supply Agreement

(RTTNews) - Amgen (AMGN) said that it reached a six-year Sourcing and Supply Agreement with DaVita Inc. This is a continuation of Amgen's long-term relationship with DaVita that is focused on serving dialysis patients.

As per the terms of the new agreement, Amgen will supply DaVita with EPOGEN® (epoetin alfa) and Aranesp (darbepoetin alfa) in amounts necessary to meet a specified annual percentage of DaVita's and its affiliates' requirements for erythropoiesis-stimulating agents used in providing dialysis services in the United States and Puerto Rico. The percentage varies during the term of the new agreement from January 6, 2017, through Dec. 31, 2022, but in each year is at least 90 percent. The new agreement will replace the Sourcing and Supply Agreement dated November 15, 2011, between Amgen and DaVita that would have expired on December 31, 2018.

Separately, DaVita provided initial 2017 guidance for its Kidney Care business. Including the financial impact of this agreement, the company expects 2017 operating income in its Kidney Care segment to be between $1.525 billion and $1.625 billion. Additionally, as the company had previously stated, it expects 2017 operating income in its DaVita Medical Group segment to be roughly flat with 2016 adjusted operating income. The company intends to provide complete 2017 operating income guidance in its Q4 2016 earnings announcement.

Earlier today, Amgen and Immatics Biotechnologies GmbH, a leading company in the field of cancer immunotherapy, announced a research collaboration and exclusive license agreement to develop next-generation, T-cell engaging bispecific immunotherapies targeting multiple cancers.

The collaboration will combine Immatics' world-leading XPRESIDENT® target discovery and T-cell receptor (TCR) capabilities with Amgen's validated Bispecific T-cell Engager (BiTE) technology with the aim of creating novel oncology drugs. Amgen will be responsible for the clinical development, manufacturing and commercialization worldwide.

Under the terms of the agreement, Immatics will receive an upfront fee of $30 million and is eligible to receive over $500 million in development, regulatory and commercial milestone payments for each program and tiered royalties up to a double-digit percentage of net sales.