By Soyoung Kim
Aug 24 Amgen Inc is close to buying
Onyx Pharmaceuticals Inc for $125 per share, or more
than $10 billion, in a deal that is expected to be announced as
soon as Monday, two people familiar with the matter said on
A deal, which is still being finalized and would require
board approval from both companies, would represent the
fifth-largest biotechnology deal in history.
The proposed takeover would value Onyx at 13 times the
company's expected revenues for next year, one of the richest
valuations in biotech takeovers, one of the people said.
The people asked not to be identified because the matter is
not public. Representatives for Amgen and Onyx could not be
immediately reached for comment.
The acquisition of Onyx would give Amgen full rights to
Kyprolis, the new multiple myeloma drug that analysts expect to
reach annual peak sales in excess of $2 billion.
Amgen would also gain a revenue stream from the liver and
kidney cancer drug Nexavar that Onyx shares with Bayer AG, as
well as royalty payments on Bayer's much newer colon cancer drug
Stivarga and potential future royalties on an experimental
breast cancer drug being developed by Pfizer.
A deal in the $10 billion range would be Amgen's biggest
since its $16 billion acquisition of Immunex in 2001 that gave
it the rheumatoid arthritis drug, Enbrel, which is one of
Amgen's most important, biggest-selling products.
It would be by far the biggest deal under CEO Bob Bradway,
who took over the top spot in May 2012. He has done a handful of
much smaller deals, the biggest to date being a $1.16 billion
acquisition of Micromet.
FOCUS ON ONCOLOGY
Onyx shares closed at $116.96 on Friday. Amgen offered to
pay $120 per share for the company in June but Onyx said that
bid significantly undervalued the company and put itself up for
An Onyx deal would also give Amgen a much higher profile in
oncology. Several of its current drugs offer supportive care for
cancer patients, such as to treat anemia or decreases in white
blood cells caused by chemotherapy.
Another of its newer medicines, Xgeva, helps prevent
fractures in patients whose cancers have spread to the bone. Its
one product that treats cancer, the colon cancer drug Vectibix,
has largely been a disappointment.
Analysts are expecting Onyx revenue to reach $878 million in
2014, according to Thomson Reuters I/B/E/S.
Geoffrey Porges, long-time biotech analyst for Sanford
Bernstein, projected that an Onyx acquisition would boost Amgen
revenue by 5 percent to 6 percent near term, rising to 20
percent by 2021.
He sees Amgen EPS declining by 3 percent to 4 percent in
2014 with the purchase of Onyx, but increasing by 8 percent in
2016 and growing to an increase of 22 percent in 2019.
Two of Amgen's biggest products - the anemia drugs Aranesp
and Epogen - have been in decline for years, while others are
fairly mature at this point.
The New York Times first reported on Saturday that the two
companies were near a deal.