Shares of Five Prime Therapeutics (NASDAQ: FPRX) are surging on Thursday after the announcement that drugmaker Amgen Inc (NASDAQ: AMGN) will pay about $1.9 billion in cash to acquire the company.
Amgen will pay $38 per share, representing a premium of nearly 79% on Five Prime's closing price of $21.26 on the 3rd of March.
The deal gives Amgen access to Five Primes' drug candidate Bemarituzumab, which is ready to enter a late-stage trial for treating advanced gastric cancer. In a placebo-controlled Phase 2 study, the drug provided positive data.
The company believes the drug could play a key role in other epithelial cancers, including lung, breast, ovarian and more.
Amgen's acquisition of Five Prime also supports its international expansion strategy, and they expect to generate significant volume growth in the coming years.
Five Prime Therapeutics shares are trading 78% higher premarket at $37.86. Amgen shares are unmoved, gaining 0.34% to $224.70 per share.