Onyx Shares Rise in Early Trading on Possible Sale of Company
Onyx Pharmaceuticals Inc., (ONXX) the developer of the kidney-cancer treatment Nexavar, climbed 4.4 percent in New York trading on optimism the company may be sold.
Onyx rose $1.88 to $44.68 at the close. The shares of the South San Francisco, California-based drug developer surged 14 percent yesterday after two people with knowledge of the matter said the company is exploring options including a possible sale.
Potential buyers are studying Onyx’s business and its experimental carfilzomib cancer therapy, said one of the people who declined to be identified as the discussions are private. Onyx had a market value of about $2.4 billion as of Nov. 25 and is working with Centerview Partners LLP to review alternatives, said the people.
Onyx gave itself more strategic options last month when it settled a lawsuit with Bayer AG (BAYN) over the experimental cancer medicine regorafenib and amended its collaboration agreement for Nexavar, said Jim Birchenough, an analyst at Bank of Montreal. The Oct. 11 agreement relieves Onyx from any future development or commercialization costs for regorafenib.
The deal with Leverkusen, Germany-based Bayer includes a 20 percent royalty payment on future sales of regorafenib for Onyx, or its acquirer. The drug may generate $106 million by the end of 2014, according to analysts. Potential buyers of Onyx also retain 50-50 profit sharing rights to Nexavar, which may hit $518.2 million in sales this year, according to the average estimate of six analysts in a Bloomberg survey.
Onyx today said the U.S. Food and Drug Administration accepted a new drug application for carfilzomib for the potential treatment of patients with relapsed, refractory multiple myeloma.
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