Onyx Pharmaceuticals said it is seeking potential buyers after the company rejected an unsolicited takeover proposal from Amgen for $120 per share in cash, or about $10 billion. The company's stock gained as much as 54.3 percent on Monday after declining Amgen's offer, which it described as "significantly [undervaluing] Onyx and its prospects."
Among the companies touted as potential suitors are Pfizer, Bayer and Novartis, which all declined to comment on the speculation. Roche and Celgene have also been viewed as possible buyers. Deutsche Bank analyst Robyn Karnauskas commented that "in our opinion, this $120-per-share offer could be Amgen's effort to bring both parties to the negotiation table." The analyst estimated that an Amgen offer for Onyx valued at $140 per share would be 5 percent dilutive to 2014 earnings and slightly accretive in 2015, adding that Onyx could be acquired for as much as $148 per share.
Onyx markets the multiple myeloma treatment Kyprolis (carfilzomib), which was approved by the FDA last year, and is partnered with Bayer for the kidney and liver cancer drug Nexavar (sorafenib) as well as the colon cancer drug Stivarga (regorafenib). Last month, Bayer and Onyx announced positive results for Nexavar in thyroid cancer, and filed the therapy for US and EU approval in that indication on Monday. ISI Group analyst Mark Schoenebaum noted that Amgen has an extensive cancer franchise, which includes Aranesp (darbepoetin alfa), Neupogen (filgrastim), Neulasta (pegfilgrastim) and Xgeva (denosumab), although "none of these drugs are direct anti-tumour agents. Thus, strategically, Onyx's drug Kyprolis would fit in exceptionally well with Amgen's existing sales and marketing infrastructure."
In addition, Onyx is also eligible to receive an 8-percent royalty on future sales of the experimental breast cancer therapy palbociclib, which is being developed by Pfizer. Schoenebaum, who estimates that palbociclib could be approved between 2015 and 2017, said "the market opportunity for [the drug] is at least $2 billion in our view and perhaps much more." He suggested the rights to the compound could be sold for a major profit by any company that buys Onyx, as the trend toward acquiring royalty streams has increased recently. Meanwhile, Sanford Bernstein analyst Geoff Porges forecasted 2019 global net sales for palbociclib of $3 billion, suggesting Onyx's royalty would bring in $230 million.
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