Onyx Pharmaceuticals still on the block after turning down Amgen

City A.M. Reporter
CANCER drugmaker Onyx Pharmaceuticals has said it still is considering selling itself, after rejecting a roughly $10bn takeover offer from larger biotechnology company Amgen as too low over the weekend.

Onyx said Amgen’s cash offer of $120 a share, which represents a premium of about 38 per cent to the company’s Friday closing price, “significantly undervalued” its prospects.

Deutsche Bank analyst Robin Karnauskas estimated Onyx’s value to a merger partner at up to $148 a share. At $140 a share, the deal would add to Amgen’s earnings starting in 2015, she said in a research note.

Onyx said in a statement it was “actively exploring” a merger partner, and that it had hired financial advisor Centerview Partners to contact potential buyers. The San Francisco-based company cited “expressions of interest” from Amgen and other unnamed third parties.

An Onyx spokeswoman declined to comment further on the statement. Amgen did not respond to a request for comment. Onyx has a market cap of $6.32bn and revenue of $362m in 2012, while Amgen is the world’s largest biotech company, with a market cap of about $74bn. Onyx sells Nexavar, a treatment for liver and kidney cancer, as well as colon cancer drug Stivarga in partnership with German pharmaceutical company Bayer. Last year, Onyx launched sales of blood cancer drug Krypolis, which Karnauskas estimates will reach peak annual sales of $3bn.

Amgen has been looking for new ways to boost its product pipeline as sales for its flagship anaemia drugs Aranesp and Epogen have been in a decline for years because of usage restrictions and safety concerns.