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Onyx rejects $10bn takeover bid from Amgen

Says offer is too low, but doesn't rule out a deal

Amgen - flag on building

Cancer specialist Onyx Pharmaceuticals has rejected a $10bn unsolicited takeover offer from biopharma giant Amgen as being too low, but said it may consider a sale of the business.

Amgen has offered $120 per share for San Francisco-based Onyx, which is best known for its Bayer-partnered liver and kidney cancer therapy Nexavar (sorafenib) and Kyprolis (carfilzomib) for multiple myeloma.

Shares in Onyx are currently trading at around $86 so Amgen's offer represents healthy premium, but analysts have suggested the company could command significantly more - perhaps as much as $145-plus - if other bidders come forward. 

Onyx suggests that is likely to be the case, saying in a statement that it has received "expressions of interest … from other third parties" and will now "contact potential acquirers who may have an interest in the company".

The company can probably afford to play hardball with Amgen, as it seems set on course for impressive growth over the coming years. 

Revenues were a little over $360m last year, coming mainly from a share of Nexavar sales and another Bayer-partnered product - Stivarga (regorafenib) for colorectal cancer - which has racked up around $100m since its debut in the US last September and approval in Japan last month. 

Sales are expected to rise rapidly, particularly as the company now has its own product on the market in the form of Kyprolis, which has been tipped as a potential $3bn-a-year blockbuster.

"Onyx has tremendous momentum, with the expansion of our pipeline and two successful product launches," said the company's chief executive Anthony Coles, adding: "[we] remain focused on the opportunities in front of us, including the potential to expand the use of our existing therapies in different types of cancer and across different lines of therapy."

For example, Bayer and Onyx have just filed in the US and Europe to expand the uses of Nexavar to include thyroid cancer.

Amgen's bid comes at a time when it has started to see its revenues come under pressure, with first quarter revenues of $4.2bn failing to meet expectations on the back of declining sales for its anaemia products Epogen (epoetin alfa) and Aranesp (darbepoetin alfa) and white cell stimulators Neupogen (filgrastim) and Neulasta (pegfilgrastim).

The company has also suffered recent pipeline disappointments. It was forced to drop development of UCB-partnered romosozumab as a treatment for bone fractures (although the drug remains in development for postmenopausal osteoporosis) while Aranesp failed to show efficacy in a phase III heart failure trial.

1st July 2013

From: Research, Sales

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