Please login to the form below

Not currently logged in
Email:
Password:

Amgen and Onyx agree $10.4bn takeover deal

Deal provides indication of the premium big biopharma will pay to replenish pipelines

Amgen flag

After much horse-trading, the boards of both Amgen and Onyx have added their signatures to a $125-per-share takeover deal.

The agreement is higher than Amgen's original (and rejected) $120 bid, but lower than the $130 offer rumoured to be under discussion over the last couple of weeks as Amgen sought to gain access to data on Onyx's multiple myeloma drug Kyprolis (carfilzomib).

Amgen had been seeking greater visibility on the prospects for Kyprolis - the only product in Onyx pipeline to which it owns all rights (with the exception of Japan) - before arriving at a final figure for the company.

The size of the deal - at around 13 times annual earnings - is an indicator of the premium big biopharma companies are prepared to pay to replenish their product pipelines. 

"We felt this opportunity was strategically compelling for us, enabling us to build on our strength in oncology, an area in which we are one of the world's leaders - with revenues of about $7bn in 2012 - and to add to our long-term growth prospects," said Amgen's chief executive Robert Bradway on a conference call.

Anticipating questions about Amgen's reading of Kyprolis' prospects, Bradway said it is a "best-in-class proteasome inhibitor with a superior safety profile [and] great potential … in earlier lines of multiple myeloma". 

He also pointed to a follow-up proteasome inhibitor in phase II, oprozomib, which could play a role in maintenance and combination therapy, while noting that Onyx' partnered products will provide a lift to revenue and earnings growth.

Onyx already earns royalty revenues from Bayer for cancer drugs Nexavar (sorafenib) and Stivarga (regorafenib), and also has palbociclib in phase III for breast cancer which is partnered with Pfizer and was recently granted breakthrough status in the US. Amgen also has co-promotion rights to Nexavar and Stivarga in the US.

Amgen's Bradway stressed that the partnered products were an important consideration in the deal, playing down suggestions they could be hived off to raise cash.

While top-tier biopharma companies such as Amgen have been able to resist the steep patent cliff that have affected big pharma companies thanks to the complexities in showing equivalency to their biologic drugs, they are starting the feel the effects of competition from biosimilars in some markets.

Amgen is no exception, with biosimilars already eating into the market share of its first-generation products such as Epogen (epoetin alfa) and Neupogen (filgrastim), as well as longer-acting versions of the drugs.

The biopharma giant said the Onyx acquisition would cost $9.7bn, net of Onyx' cash reserves, and could be funded with the help of an $8.1bn loan facility.

27th August 2013

From: Research, Sales

Share

Tags

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Complete Medical Communications (CMC)

CMC is a leading global agency dedicated to healthcare communications across the lifecycle. We combine scientific acumen, excellence in delivery...

Latest intelligence

PM Society Digital Awards – the power of together
Our chief executive, Emma Statham, writes about the value of awards and the power of together....
Seduction_feature_image_thumb.jpg
Seduce anyone in four simple steps
You know the health of the global economy is dependent on our ability to seduce one another – don’t you? And you know that we need to be able to...
What Would Jeremy Do? : Assessing the impact of a Corbyn-led Labour government
GK Strategy are delighted to announce the launch our latest briefing paper entitled ‘What Would Jeremy Do? Assessing the impact of a Corbyn-led Labour government’....

Infographics