Newspaper article International Herald Tribune

Maker of Cancer Drugs Shrugs off Amgen Offer ; Onyx Seen as a Prize in Industry Bustling with Acquisitions and Mergers

Newspaper article International Herald Tribune

Maker of Cancer Drugs Shrugs off Amgen Offer ; Onyx Seen as a Prize in Industry Bustling with Acquisitions and Mergers

Article excerpt

Onyx Pharmaceuticals has put itself up for sale after having rejected an unsolicited $10 billion takeover bid by the biotechnology giant Amgen last week as too low.

Onyx Pharmaceuticals has put itself up for sale after having rejected an unsolicited $10 billion takeover bid by the biotechnology giant Amgen last week as too low.

The company said in a statement that Amgen had proposed paying $120 a share in cash, a 38 percent premium to Onyx's closing price Friday. Onyx, which makes biopharmaceutical drugs, said Sunday it had hired the investment bank Centerview Partners to contact possible suitors.

Onyx formally rejected Amgen's approach Friday. Shares in the drug maker first began rising in after-hours trading soon afterward, after The Financial Post of Canada reported the offer.

A sale of Onyx, based in California, would be the latest deal in the health care industry, one of the busiest for mergers and acquisitions in recent years. The sector shows few signs of slowing down: About $93.5 billion worth of transactions was announced in the first half of this year, up 13 percent from the same time last year, according to data from Thomson Reuters.

Developing cancer drugs has become a priority for almost all of the big pharmaceutical companies, in part because the drugs can command high prices. That means potential suitors abound for Onyx.

"The hottest area right now of acquisitions are fully owned oncology drugs, and those are scarce," Mark Schoenebaum, a biotechnology and pharmaceutical analyst at ISI Group, said Sunday. "Strategically, there could be a dozen companies interested."

Onyx is considered a newly emerging success story in the biotechnology field. The so-called Big Four of biotech -- Amgen, Gilead Sciences, Celgene and Biogen Idec -- have annual revenues of at least $5 billion and market valuations of at least $50 billion or so. Onyx is considered in the next tier, along with companies like Regeneron Pharmaceuticals, Vertex Pharmaceuticals and Alexion Pharmaceuticals. Those companies have recently crossed or are possibly close to crossing $1 billion in annual sales and have market capitalizations of $6 billion to $22 billion.

Onyx sells or helps sell three cancer drugs, two of which won approval in 2012, broadening its portfolio and making it more attractive to potential acquirers.

Its oldest drug, which it sells with Bayer, is Nexavar, which is approved to treat liver and kidney cancers. Last year, Bayer won approval for Stivarga to treat colorectal cancer. Onyx helps sell that drug in the United States and earns a royalty on global sales.

But Onyx's crown jewel is Kyprolis, a drug for multiple myeloma that was approved last July and which Onyx fully owns. …

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