Biotechnology company Onyx rejects Amgen’s $10 -bn takeover bid

Biotechnology company Onyx Pharmaceuticals Inc yesterday rejected an unsolicited $10-billion in cash takeover bid from its larger rival Amgen Inc as being too low. It is looking at other offers.

San Francisco-based Onyx, the maker of Nexavar cancer drug, said that after evaluating Amgen's proposal, it has concluded that the offer significantly undervalued the company and its prospects, and was not in the best interest of Onyx or its shareholders.

Onyx added that it has received expressions of interest received from other third parties and its board has authorised its financial advisor to contact potential acquirers who may have an interest in the company in a deal that would be in the best interest of shareholders.

"Onyx has tremendous momentum and, with the expansion of our pipeline and two successful product launches, the company and our talented employees have created significant value for Onyx shareholders,'' said Dr. Anthony Coles, chairman and CEO.

"The Board and the management team 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, as a result of several ongoing Phase 3 studies. We are actively exploring the potential to combine Onyx with another company as an option to create additional value for Onyx shareholders,'' he added.

Last week, Amgen, based in Thousand Oaks, California, offered to buy Onyx for $120 a share or about $10 billion, a 34-per cent premium to Onyx's closing share price, and requested due diligence and a document review period. (See: Amgen eyes $10-bn cash deal with Onyx Pharmaceuticals)

Onyx develops innovative drugs for treating cancer. Its key drugs are Nexavar, for treating patients with advanced cancer in the kidney and liver, and Kyprolis, a proteasome inhibitor for treating patients with multiple myeloma.

In the pipeline are Sorafenib, which has been evaluated in a Phase 3 trial for treating thyroid cancer, and is currently being evaluated in late-stage studies in breast cancer and as an add-on treatment for liver and kidney cancer following surgery.

Nexavar and Sorafenib are marketed in collaboration with German pharmaceutical giant Bayer HealthCare.

Carfilzomib is being studied in multiple clinical trials either as a single-agent or in combination with other therapies for the treatment of patients with multiple myeloma, and Palbociclib, a collaboration with Pfizer and currently in Phase 3 clinical development for hematologic malignancies and solid tumors.

Onyx would receive milestone and royalty payments on Palbociclib worldwide sales.

Also in the pipeline is ONX 0914, an immunoproteasome inhibitor for treating autoimmune disorders, such as rheumatoid arthritis, inflammatory bowel disease and lupus.

The company reported a net loss of $187.8 million in 2012 on revenue of $362.2 million.

Onyx has a market cap of $6.32 billion, while Amgen has a market cap of about $79.7 billion and annual revenues of $16.6 billion.

The last mega deal done this year in the life sciences sector was the$13.6 billion proposed acquisition of Life Technologies Corp by Thermo Fisher Scientific.