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UPDATE 4-Amgen sells Takeda rights to experimental drugs

(Adds analyst comment, details, rewrites)

TOKYO, Feb 4 (Reuters) - Amgen Inc AMGN.O said on Monday it has agreed to sell the rights to 13 of its experimental drugs to Takeda Pharmaceutical Co Ltd 4502.T in a bid to defray costs and generate cash as sales of its biggest-selling anemia drug slow amid safety concerns.

Under the agreement, Takeda, Japan’s largest pharmaceutical company, will pay Amgen $200 million up front and as much as $702 million more if key development milestones are met. Amgen would also receive a double-digit royalty on Japan sales of any commercialized product.

In addition, Takeda will pay Amgen $100 million up front and as much as $175 million in milestones for rights to its experimental cancer drug motesanib diphosphate, formerly known as AMG-706. Amgen would receive double-digit royalties on Japan sales and the two companies would split the profit 50-50 outside Japan.

Takeda will acquire all the shares of Thousand Oaks, California-based Amgen’s Japanese subsidiary.

Analysts say the agreement will not hurt Amgen, the world’s biggest biotechnology company, but will not help it much either.

“I don’t see this deal as meaningful at all,” said Eric Schmidt, an analyst at Cowen & Co. “The money Amgen will take in is a pittance relative to their overall research spending, and royalties from Japan are likely to be modest also.”

Amgen’s shares slipped 20 cents in early trading to $47.56 on Nasdaq.

Kevin Sharer, Amgen’s chief executive, said in a statement that Takeda’s confidence in Amgen’s experimental products “validates their potential to become innovative therapies for patients in Japan and worldwide.”

But analysts are not impressed.

“For a younger, less established firm this might represent a nice validation of the compounds, but you would think Amgen would be beyond that,” said Christopher Raymond, an analyst at Robert W. Baird.

Amgen has been hit by a sharp decline in its top-selling anemia drug Aranesp on safety concerns, prompting it to restructure and cut costs.

Takeda, best known for its diabetes drug Actos, has been under pressure to step up its mergers and acquisitions and licensing activity following a drug setback late last year and after Eisai Co Ltd 4523.T outshone it with its $3.9 billion acquisition of cancer specialist MGI Pharma.

But the deal will not help Takeda much either, analysts say.

“Takeda needs more biotech drug candidates, so this is a good thing, but having said that -- in this deal, for all but one of the drugs, Takeda has gained only the Japan rights, so its hard to get too excited about it,” said Hiroshi Tanaka, senior analyst at Mizuho Securities.

Takeda does receive a global stake in motesanib diphosphate, but while the drug was once a big hope for Amgen, analysts no longer see it as a blockbuster.

“Few of us have given it much credit over the last year or two,” Schmidt said.

Amgen said the deal was not a decision to pull out of the Japan market.

“It will allow us to get into the Japanese market in a bigger and faster way,” Dominique Monnet, Amgen’s vice president for global marketing, said in a telephone interview, adding that similar deals in other markets were also possible.

“I would not exclude it,” he said. “We remain pragmatic.”

The companies, who each said their earnings outlook would be unaffected, announced the deal after the close of Tokyo trading, but an earlier newspaper report that an announcement was imminent failed to lift Takeda’s share price.

It ended down 0.6 percent at 6,340 yen compared with 0.2 percent decline for the pharmaceutical subindex .IPHAM.T. ($1=106.88 Yen) (Additional reporting by Toni Clarke in Boston, editing by Maureen Bavdek)

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