Amgen Shares Rise Amid Talk Of Possible Bid From Johnson & Johnson
June 24, 1998 1:50 PM
By Melanie Trottman, Staff Reporter
NEW YORK -(Dow Jones)- Shares of Amgen Inc.
rose Wednesday amid talk that Johnson & Johnson is
interested in acquiring the biotechnology firm in a merger
that would value Amgen at $100 a share - far above
Amgen's market price.
But analysts said a merger of the two companies is
unlikely and suggested news Tuesday of eased
Medicare reimbursement restrictions for Amgen's red
blood cell booster, Epogen, might be boosting the stock.
In afternoon trading, shares of Amgen (AMGN), based
in Thousand Oaks, Calif., were up $2.6875, or 4.3%, at
$65.375 on volume of just under five million, twice the
daily average of 2.5 million. Shares of Johnson &
Johnson (JNJ), meanwhile, were up $1.125 at $77.50.
Officials from both companies declined to comment,
citing corporate policies of not commenting on
speculation or rumors.
Based on about 254.1 million Amgen shares outstanding
as of March 31, the rumored deal would value Amgen
at about $25.41 billion.
"I've heard that rumor before," said Bear Stearns & Co.
analyst David Molowa. "Amgen's relationship with J&J
historically has been very acrimonious, so therefore it
would be a bit surprising if they were to do anything on a
friendly basis," he said.
Gruntal & Co. analyst David Saks said he has also
heard speculation about a takeover of Amgen, both
Wednesday and in the past. The latest talk of a Johnson
& Johnson merger has no merit, Saks said. "I think it's
poppycock," he said.
Saks, who puts Amgen's market capitalization at $17
billion, contends it isn't Johnson & Johnson's style to go
after a blockbuster acquisition of this sort.
Last month, there was talk that DuPont Co. (DD) was
eyeing Amgen. Most analysts downplayed that rumor,
however.
Tuesday, PaineWebber Inc. Elise Wang said the Health
Care Financing Administration reversed a good number
of the guideline restrictions previously placed on
reimbursement of Epogen, which is used by
kidney-dialysis patients.
The new rules allow full reimbursement for Epogen,
which previously was only partially reimbursable. Wang
said the development should spur more usage of the
drug.
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