Onyx explores possible sale after rejecting Amgen offer

Sun Jun 30, 2013 8:15pm EDT
 
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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 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. 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...