BGNE stock is on roll after Amgen Inc. (NASDAQ:AMGN) announced that it is investing around $2.7 billion in Chinese biotech company BeiGene Ltd (NASDAQ:BGNE). The company will take a 20.5% stake in the drug developer. This is a deal that will see BeiGene develop and commercialize Amgen’s experimental and on-market cancer medicines in China.

BeiGene to Commercialize Amgen Cancer Drugs in China

This all-cash deal will see Amgen pay $174.85 per American depositary receipt, which will be a 25% premium on the stock’s closing price on Wednesday. Following the announcement, BGNE stock jumped 7% on Thursday in after-hours trading while shares of Amgen dipped 1%.

Following the agreement, BeiGene will take over commercialization of Amgen’s three cancer drugs for the Chinese market. Amgen’s cancer drug Xgeva is already in the Chinese market, while Blincyto and Kyproilis are near approval in China. The two companies will equally share any loss or profits.

Also, the companies will work together to develop another 20 new cancer drugs in Amgen’s pipeline in China and other places. The deal, which will likely close at the beginning of next year, will boost the footprint of Amgen in the rapidly growing oncology market in China.

BGNE stock is up 29.56% at $179.30.

Amgen Determined to Expand Global Reach

Amgen’s VP for commercial operations, Murdo Gordon, stated the company has been looking to expand its geographic reach for the last five years. He added that the company wants to ensure that its novel therapies receive approval fast in the West as well as in Asia.

The deal with BeiGene is a huge win for Amgen, considering the Chinese company equally develops cancer drugs. Each year, there are close to 4 million diagnosed cancer patients, and the company indicates that it is enhancing its operations to reach more people. Since 2011, Amgen has expanded its operations to almost 100 countries from 50 countries.

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The deal comes at a time when there is an ongoing trade war between the US and China. However, Amgen CFO David Meline said that they were keen on the ongoing negotiations between the countries.

BGNE stock has soared 56% over the past three weeks.

Featured image: DepositPhotos © avemario