Tags: Onyx | takeover | bids | Nexavar

Initial Takeover Bids for Onyx Seen as Soon as This Week

Tuesday, 16 Jul 2013 02:21 PM

 

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Onyx Pharmaceuticals Inc. is expected to receive initial takeover bids as soon as this week after attracting interest from a few drugmakers, including Amgen Inc., according to several people familiar with the matter.

Amgen, whose opening offer of $120 per share was rejected by Onyx's board in late June and led to an auction of the company, is still keen to buy Onyx and appears to be the most likely buyer, the people said this week.

Other pharmaceutical companies including Pfizer, Bristol-Myers Squibb Co. and Gilead Sciences Inc. have also been evaluating a deal, though it remains unclear if those parties will proceed with offers given Onyx's rich valuation, with a market value of nearly $10 billion, the people said.

While a number of big pharmaceutical and smaller biotech companies signed confidentiality agreements to take an initial look, many of the parties balked at Onyx's price tag and decided against bidding for the cancer drugmaker, the people said.

There is no specific date for first-round bids, but interested parties are expected to submit non-binding offers this week, the sources said, asking not to be named because details of the auction are not public.

Representatives for Onyx and Pfizer declined to comment. Bristol-Myers, Gilead and Amgen could not be immediately reached for comment.

Shares of Onyx have surged more than 50 percent since June 30 when it put itself up for sale citing expressions of interest from Amgen and other third parties. Onyx shares were up $1.58 to $132.75 in afternoon trading on Tuesday.

The steep stock price increase has deterred several drugmakers, leaving a relatively short list of remaining bidders just two weeks into the process, the people said.

The drugmakers, which have opted not to pursue a deal, include Novartis AG, GlaxoSmithKline Plc, Sanofi SA and Biogen Idec Inc., the people familiar with the matter said. The companies declined to comment.

Onyx hopes to wrap up the auction by the end of the summer, some of the people added.

Large pharmaceutical and biotech companies have been looking to acquire smaller biotech firms to gain access to new drugs and offset revenue losses stemming from expired patents, but rich valuations of target companies are proving to be a big hurdle to dealmaking.

Onyx sells Nexavar, a treatment for liver and kidney cancer, and the new colon cancer drug Stivarga, both in partnership with Germany's Bayer. Onyx last year began selling Krypolis, which some analysts estimate will reach peak annual sales of $3 billion.

© 2014 Thomson/Reuters. All rights reserved.

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