INVESTORS ABANDON AMGEN STOCK PRICE PLUNGES ON ACQUISITION REPORT.

Byline: Evan Pondel Staff Writer

THOUSAND OAKS - Amgen Inc. was punished by investors Thursday amid reports the world's largest biotechnology company is in late-stage talks to purchase Immunex for $18 billion in cash and stock.

``If the rumors are true, it's a big mistake for the company,'' said Douglas Christopher, an analyst with Crowell Weedon in Los Angeles.

Following a CNBC report about the proposed acquisition, Wall Street's perception of the deal speaks for itself, Christopher said.

Amgen shares declined $4.20, or 6.5 percent, to $60.19, while Immunex leaped $2.51, or 10.27 percent, to $26.96 by the end of the trading day.

What irks David Molowa, analyst with J.P. Morgan in New York, is that the deal would have a negative impact on Amgen's earnings. Hinging on the success of the Thousand Oaks-based company's two recently approved drugs, Amgen projected in November that it would have earnings-per-share growth in the low 20 percent range for 2002.

``This deal is extremely dilutive to near-term earnings,'' Molowa said. ``And the market is telling the company that we don't like this transaction.''

Amgen and Immunex did not return repeated calls for comment Thursday.

Aside from the potential of less-palatable earnings, Amgen already has its hands full with its newly approved rheumatoid arthritis drug Kineret and anemia drug Aranesp.

Christopher said the company has enough marketing expenses in its attempt to farm out these two new drugs.

``Acquisitions are big things and expensive acquisitions never pay,'' he said.

Barring the exorbitant costs associated with the transaction, there are other ramifications that could sour the deal.

American Home products owns about 41 percent of Immunex. The Madison, N.J.-based company co-markets Immunex's popular arthritis drug Enbrel. If Amgen acquires Immunex and attempts to market its arthritis drug Kineret with Enbrel, the newly formed company could run into a morass of antitrust problems.

``Because of this, I find the deal improbable,'' said Dennis Harp, analyst with Deutsche Banc Alex. Brown in New York. ``And given the number of players involved in the deal (three separate companies) ... there's no strong incentive.''

Even so, from Immunex's perspective, the deal could potentially bolster the Seattle-based drug manufacturer's performance. With Amgen, the No. 1 biotechnology company in the nation, its marketing breadth could further propel Immunex's product outreach.

``For this reason, in the near term, the deal is more positive for Immunex than Amgen,'' said Fariba Ghodsian, analyst with Roth Capital Partners Inc.

The transaction could also alleviate the competition posed between Amgen's Kineret and Immunex's Enbrel. Currently, Enbrel is a far superior drug to Kineret, according to Paul Latta, analyst with McAdams Wright Ragen Inc. in Seattle.

Amgen's reported talks with Immunex comes on the heels of an earlier announcement Thursday that Amgen and Carlsbad-based Isis Pharmaceuticals have entered into a three-year collaboration to discover antisense drugs, which interrupt the process by which disease-causing proteins are produced.

Lynne Parshall, chief financial officer and executive vice president of Isis, said she had no knowledge of the supposed Amgen/Immunex deal prior to reports.

``If it's something Amgen is interested in doing it just shows Amgen's foresight,'' Parshall said. ``And if they are going to go through with this, we applaud them.''

Not so for Seattle residents.

Latta said Immunex is the largest biotechnology company in Seattle and that after losing Boeing this year, the Northwest can't afford more job cuts.

``To lose the core biotechnology player is a blow to the Seattle biotech community,'' he said. ``The company may not move out the area, but it's fair to say they wouldn't grow employment here.''