After the markets closed on Friday, the news that Amgen has made a $10 B offer for Onyx, caused he latters stock to shoot up nearly 25% for $86 per share to over $109. The offer is said to be for $120 per share. Onyx confirmed existence of an offer and also said they were turning it down, but did plan to put itself on the block and entertain competitive offers. This is seen as a strategy for extracting top dollar -- as any good management should for its shareholders.
Bayer as seen as a likely second suitor. They already partner with Onyx n the successful cancer drug Nexavar and control most of the revenue that will be associated with Stivarga (with 20% royalties going to Onyx). Onyx also has the fat-track drug Kyprolis coming through the pipeline and that adds further to its attractiveness as an acquisition.
Both Amgen and Bayer are working diligently to add to their cancer portfolios. Both have plenty of cash -- they can easily swing a $10B deal. Now its time to see how hight the price will go and whether other bidders may also join in the fray? There are a lot of big pocketed companies out there with anemic pipelines and Onyx appears to be a genuinely good target. Let the auction begin. See Fierce Biotech.
Posted by Bruce Lehr Jul 1st 2013.