Amgen said on Monday it has agreed to buy privately held Ilypsa, which is developing a drug for chronic kidney disease, for $420 million in cash.
Directors from each company and shareholders of Ilypsa have approved the proposed acquisition. The deal should close by the third quarter of 2007, the companies said.
Santa Clara, California-based Ilypsa's lead experimental drug candidate is ILY101, which is designed to treat hyperphosphatemia in chronic kidney disease in patients on hemodialysis.
Many large pharmaceutical companies are faced with looming patent expirations on drugs that bring in the majority of their sales and are buying smaller firms with promising products in a bid to secure future revenue.
Amgen's key products include anemia drugs Aranesp and Epogen, which are the focus of recent safety concerns.
Shares in Amgen closed down 3 cents to $56.91 on the Nasdaq, down about 18% from a year ago.