Pfizer, Novartis may join Amgen in bidding for Onyx: sources

Mon Jul 1, 2013 6:37pm EDT
 
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By Soyoung Kim and Jessica Toonkel

NEW YORK (Reuters) - Onyx Pharmaceuticals Inc ONXX.O, whose cancer drugs promise a strong revenue stream, is attracting preliminary buyout interest from several large pharmaceutical companies such as Pfizer Inc (PFE.N: Quote) and Novartis AG NOVN.VX, two people familiar with the matter said on Monday.

Onyx, a biotechnology company with a market value of around $9.5 billion, put itself up for sale on Sunday, citing "expressions of interest" from unnamed companies. It also said it had rejected a recent $8.7 billion offer from larger biotech Amgen Inc (AMGN.O: Quote) as too low.

Pfizer, which is due to pay Onyx royalties on a promising experimental breast cancer drug, and Novartis, with a strong franchise of cancer medicines, are among the parties interested in Onyx and its portfolio of marketed cancer treatments, the two sources said.

Amgen's $120-per-share offer in June was its first and the company did not indicate if it was the best and final, according to a third person familiar with the matter, who expected Amgen to participate in the auction process.

The offer represented a 38 percent premium to Onyx's Friday closing share price of $86.82.

Onyx surged 51.3 percent to close at $131.33 on Nasdaq on Monday, well above Amgen's offer, suggesting investors expect bids to go much higher.

San Francisco-based Onyx could appeal to a wider group of large biotech and pharmaceutical companies, including Bayer AG (BAYGn.DE: Quote), AstraZeneca Plc (AZN.L: Quote) and Merck & Co (MRK.N: Quote), several people familiar with the matter said.

All the sources in this story were not authorized to speak with the media and asked not to be identified.   Continued...