Amgen to acquire cancer drug maker Onyx for $10.4 bn

Califirnia-based biotech major Amgen will buy cancer drug maker Onyx Pharmaceuticals for about $10.4 billion in cash.

As per the deal, Amgen will acquire all of the outstanding shares of Onyx for $125 per share in cash. The purchase price is $10.4 billion, or $9.7 billion net of estimated Onyx cash.

Amgen will finance the acquisition with $8.1 billion in committed bank loans and the balance with cash available in the US.

The all-cash deal represents a 44 per cent premium to Onyx's closing price of $86.82 on 28 June, before Amgen's initial proposal became public.

Amgen intends to effect the transaction through a tender offer and expects to close the deal at the beginning of the fourth quarter, subject to the satisfaction of customary closing conditions, including the receipt of regulatory clearance.

In June, Amgen made an unsolicited offer of $120 a share for the cancer drug maker; but Onyx rejected the proposal and started fielding offers from other drug companies (See: Biotechnology company Onyx rejects Amgen's $10 bn take-over bid).

''Amgen has a unique opportunity to add value to Kyprolis, a drug designed to fight blood cancers, a product which is at an early and promising stage of its launch,'' Robert A Bradway, chairman and chief executive officer at Amgen, said.

South San Francisco-based Onyx holds global rights to Kyprolis, excluding Japan.  Amgen will benefit from the global rights to Onyx's innovative oncology portfolio and pipeline.

 Amgen intends to leverage its oncology capabilities and experience to support Onyx's clinical development programmes and maximise Kyprolis' potential in the US and the rest of the world.

The acquisition of Onyx also adds to Amgen's robust late-stage pipeline, which includes nine innovative products for which registration-enabling data are anticipated by 2016.

Four of these are innovative, first-in class oncology products. Onyx's pipeline complements Amgen's growing oncology portfolio.

Earlier, Amgen's $9.5 bn Onyx deal was stalled over a dispute on access to data from an ongoing drug trial of Onyx's new blood cancer drug. (See: Ambgen's $9.5-bn Onyx deal stumbles over cancer drug data).

In addition to accelerating Amgen's revenue growth, the acquisition of Onyx is expected to be accretive to Amgen's adjusted net income in 2015.

Amgen's top-selling products include arthritis medication Enbrel, osteoporosis drug Prolia and  anemia medicines Aranesp and Epogen.

The company had annual revenue of $17.3 billion and net income of $4.3 billion in 2012.

Last year, Onyx had reported a net loss of $187.8 million on revenue of $362.2 million.