UPDATE 3-Amgen deal for Onyx possible within week-sources
By Soyoung Kim and Jessica Toonkel
NEW YORK Aug 7 (Reuters) - Onyx Pharmaceuticals Inc is close to selling itself to larger rival Amgen Inc as the cancer drugmaker's high stock price has discouraged other companies from making a counteroffer so far, according to three people familiar with the matter.
Amgen, the world's largest biotechnology company, is in advanced discussions to buy Onyx, with the two sides working toward a possible announcement as soon as within the next week, the sources said on Wednesday.
Terms of an agreement have yet to be finalized, but the companies are negotiating a price of $130 per share, or nearly $9.5 billion based on shares outstanding. Onyx has indicated it would likely accept a deal at that price, the sources said.
Discussions could still fall apart, and there was no guarantee an agreement will be reached, according to the sources, who asked not to be identified because the matter is confidential.
Shares of Amgen jumped 6.8 percent to $112.40 on news of a likely deal, hitting their highest level since April. Onyx shares fell almost 3 percent to $128.21.
Representatives of Amgen and Onyx declined to comment.
A few other drugmakers including AstraZeneca Plc have also evaluated a deal in recent weeks but it was unclear if a rival bid would emerge, one of the people said. An AstraZeneca spokeswoman said the company does not comment on market speculation.
A deal at $130 per share would be about 8 percent higher than Amgen's initial offer of $120 per share. Onyx's board rejected that bid as too low in late June.
Before the move on Wednesday, Onyx's stock had surged more than 50 percent from the closing price of $86.82 on June 28, the last trading price before the sale process was reported.
The steep price gains, as well as the floor price that Amgen has set with its initial $120 per-share offer, deterred several pharmaceutical and biotechnology companies that would otherwise have been interested in bidding, people familiar with the matter said previously.
South San Francisco, California-based Onyx sells Nexavar, a treatment for liver and kidney cancer, and the new colon cancer drug Stivarga - both in partnership with Germany's Bayer AG . Onyx last year began selling Kyprolis for multiple myeloma, which some analysts estimate will reach peak annual sales of $3 billion.
Cancer medicines are the holy grail for many drugmakers because current products have limited effectiveness and the companies can charge huge prices for new biotech treatments.
Thousand Oaks, California-based Amgen has faced growing pressure to beef up its drug development pipeline as safety concerns have trimmed sales of its flagship anemia drugs, while patents on four of its five top-selling drugs are set to expire, starting in 2015.
The company is best known for these and other medicines used for cancer patients.