By Soyoung Kim and Jessica Toonkel
NEW YORK Aug 7 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
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
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
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.