Biogen Bets Big on Kidney Drugs with USD 5.6 Billion Apellis Pharmaceuticals Deal

The deal, announced on Tuesday, is among the largest under CEO Chris ​Viehbacher as he resets the business after the initial uptake of its closely watched Alzheimer's treatment, Leqembi, also fell ​short of lofty expectations.

The acquisition gives a foothold in kidney disease, providing a commercial base with nephrologists that could support future launches, including late-stage kidney drug felzartamab, Viehbacher told Reuters.

Apellis' Empaveli is approved for two rare kidney diseases as well as a ⁠rare blood ‌disorder while its Syfovre is approved to treat geographic atrophy, an advanced eye condition that is a leading cause of blindness.

Under the terms of the deal, expected ⁠to close in the second quarter, Apellis shareholders will receive $41 per ​share in cash, representing a premium of about 140% to the ​stock's last close.

They are also eligible for up to $4 per share in milestone payments tied to Syfovre achieving global annual sales thresholds of $1.5 billion and $2 billion between 2027 and 2030.

Analysts broadly agreed Apellis is a strong strategic fit, providing needed near-term growth for Biogen, though some raised concerns about the premium paid.

"We don't think that just looking at the spot price was really the ‌right reference," Viehbacher said, adding "what really matters is the intrinsic value and we see a lot of value in that kidney franchise in particular."

Shares of ​Apellis rose more ​than twofold in early ⁠trading, while Biogen fell nearly 5%.

"Through the addition of near-term revenue from Syfovre and Empaveli, Biogen's acquisition of Apellis could meaningfully change how investors think about near-term revenue growth as the company continues to ​manage MS declines," said BMO Capital analyst Evan Seigerman.

The two drugs generated combined revenue of about $689 million last year and are expected to grow in the mid-to-high-teens rate at least through 2028, the companies said.