Onyx explores possible sale after rejecting Amgen offer
By Ryan Vlastelica and Olivia Oran
NEW YORK (Reuters) - Cancer drugmaker Onyx Pharmaceuticals Inc ONXX.O said on Sunday it rejected a roughly $10 billion takeover offer from larger biotechnology company Amgen Inc (AMGN.O: Quote) as too low but still is considering selling itself.
Onyx said Amgen's cash offer of $120 a share, which represents a premium of about 38 percent 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 $6.32 billion and revenue of $362 million in 2012, while Amgen is the world's largest biotech company, with a market cap of about $74 billion.
Onyx sells Nexavar, a treatment for liver and kidney cancer, as well as colon cancer drug Stivarga in partnership with German pharmaceutical company Bayer AG (BAYGn.DE: Quote). Last year, Onyx launched sales of blood cancer drug Krypolis, which Karnauskas estimates will reach peak annual sales of $3 billion.
Amgen has been looking for new ways to boost its product pipeline as sales for its flagship anemia drugs Aranesp and Epogen have been in a decline for years because of usage restrictions and safety concerns. Continued...