Amgen to buy Onyx for $10.4 billion

Amgen on Sunday reached an agreement to acquire Onyx Pharmaceuticals in a deal valued at approximately $10.4 billion. The all-cash takeover values Onyx at $125 per share, which is less than investors expected but still above Amgen’s rejected offer of $120 per share. The deal, which was the subject of rumoured pricing negotiations as late as Saturday, is expected to close at the beginning of the fourth quarter.

Amgen noted that the purchase will give it access to Onyx’s multiple myeloma treatment, Kyprolis (carfilzomib), which garnered FDA approval last year and is expected to be considered by European regulators in 2014. The injectable therapy garnered sales of $125 million in the first half of this year and is expected to have revenues of $1 billion by 2015. In addition, Amgen will also gain access to Onyx’s three partnered oncology assets, which include Nexavar (sorafenib) and Stivarga (regorafenib) with Bayer and palbociclib with Pfizer. Palbociclib is currently in Phase III development for the treatment of ER+, HER2-negative advanced breast cancer and has received breakthrough therapy designation from the FDA based on preliminary Phase II data showing improvement in median progression-free survival when the drug is used as part of a combination therapy. Onyx also has multiple oncology compounds in various stages of clinical development, Amgen noted.

Commenting on the deal, Amgen CEO Robert Bradway said "we believe that Amgen is ideally suited to realise the full potential of Onyx's portfolio and pipeline," adding that the acquisition is "fully consistent with our strategy of advancing innovative medicines that address serious unmet medical needs."

Bradway added that the company "expect[s] this acquisition will accelerate growth and enhance value for Amgen shareholders." In particular, the revenue form Onyx’s portfolio will help Amgen cope with the anticipated loss in sales as some of its leading products begin facing competition.

Amgen noted that the transaction is expected to be accretive to Amgen's adjusted net income in 2015.

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