Onyx rejects Amgen offer, still looking for a merger

July 1, 2013 9:09 am

onyxOnyx Pharmaceuticals, the bio-pharmaceutical company developing cancer drugs, rejected an acquisition offer from Amgen the world largest independant bio-pharmaceutical firm for around $10 billion. The company stated it is waiting on better offers from suitors. Onyx noted that recent Amgen offer was not in the best interest of the company and shareholders.

Deutsche Bank analyst Robin Karnauskas estimation of company’s value to $148 a share. Onyx stated it was in a search of a merger partner, and that it had hired as financial advisor Centerview Partners to help with the matter. The bio-pharmaceutical company explained about interest coming from Amgen and other unnamed parties.

Onyx’s most attractive product is its blood-cancer treatment Kyprolis, a potential revolutionizing therapy. Furthermore, Onyx doesn’t have to share revenue from it with a partner in most of the world, according to a person familiar with the matter. Nevertheless, a big global drug company merge would definately influence distribution of Kyprolis making it more effective than Onyx could on its own. The cancer drug was approved in the U.S. last year and Onyx would soon launch it globally. It had sales of $64 million in the quarter ended March 31, and could reach nearly $2 billion in annual sales by 2018, according to analysts’ forecasts.

Amgen’s first-quarter sales disappointed expectations, as revenue for the period rose 5% to $4.24 billion comparing to projections of $4.37 billion. After the news of the offer from Amgen came up on Friday, Onyx shares recorded a jump. Friday’s close added, to Onyx shares for a one year gain of 31%. Shares of Amgen were up 35% over the same period.

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