UPDATE 1-U.S. biotech Amgen offered to buy Onyx for $120 per share -report

Fri Jun 28, 2013 9:20pm EDT

June 28 (Reuters) - Amgen Inc, the world's largest biotech company, has offered to buy biotech Onyx Pharmaceuticals for $120 per share in cash, Canadian newspaper Financial Post reported on Friday, sending Onyx shares up about 30 percent in after-hours trading.

The Financial Post said that documents it had seen said that Amgen had sent material to Onyx in which it said it would propose a cash acquisition worth about $10 billion and requested due diligence and a document review period.

The Financial Post said that Amgen had sent the documents to Onyx about two weeks ago. Both companies are based in California. Amgen had sales of $17.3 billion in 2012, while Onyx brought in revenue of $362 million.

Large biotech companies, once the targets of big pharmaceutical companies, have become acquirers themselves of smaller biotechs as their own stocks have run up and they have used low interest rates to bankroll their drug development.

According to the Financial Post, the documents sent to Onyx said that Amgen was prepared to "move quickly to negotiate and execute a combination with you" and that the proposal did not have financing conditions on it.

"Although we have reviewed Onyx extensively, our review has been limited to publicly available information. We would propose a focused, confirmatory due diligence and document review period," the documents said, according to the Financial Post.

It also said the proposal is subject to negotiation, conditions and board approval.

In a research note, ISI Group analyst Mark Schoenebaum said that were a deal to occur, Onyx's Kyprolis cancer drug would fit well into Amgen's cancer drug sales and marketing infrastructure and complement Amgen's portfolio of cancer drugs.

Onyx shares were trading at $111 after closing at $85.20, an increase of $25.80, or about 30 percent. Amgen shares were trading at about $98 after-hours after closing at $98.61.

Spokeswomen at Amgen and Onyx declined to comment.

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