Pharma giants target biotech firm Onyx

Several pharmaceutical giants have shown interest in Onyx Pharmaceuticals Inc, the San Francisco-based biotechnology company, which this month rejected an unsolicited $10-billion bid from its larger rival Amgen Inc.

AstraZeneca, Pfizer and Novartis are among the pharmaceutical giants that are preparing to table bids for Onyx, Bloomberg today reported, citing two people familiar with the matter.

The companies have signed confidentiality agreements and may make first-round bids this week, the report said.

Onyx is trading at $129.25, higher than the $120 per share offered by Amgen late last month. At its current share price, Onyx is valued at around $9.4 billion.

Early this month, Onyx, the maker of Nexavar cancer drug, rejected Amgen's bid after concluding that the offer significantly undervalued the company and its prospects, and was not in the best interest of Onyx or its shareholders. (See: Biotechnology company Onyx rejects Amgen's $10 -bn takeover bid)

Onyx board had said that it has received expressions of interest received from other third parties and authorised its financial advisor Centerview Partners to find potential buyers.

A 1992 spinoff from Cetus Corp and Chiron Corp merger, 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, while it alone sells Kyprolis, whose sales may rise about ninefold to $2.4 billion by 2019, according to analyst estimates compiled by Bloomberg.

It also markets Stivarga, an oral FDA approved drug for the treatment of colon or rectal cancer. Onyx receives 20 per cent royalty on all global net sales of Stivarga.

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.