The offer is currently the highest for Onyx, said the person, who asked not to be named because the process is private. Onyx disclosed in June that it was working with advisers to find a buyer after spurning an offer of $120 a share from Thousand Oaks, California-based Amgen. Onyx rejected Amgen’s proposal because management saw it as too low compared with other recent deals in the industry, a person familiar with the matter said at the time.
Amgen increased the offer after reviewing South San Francisco, California-based Onyx’s non-public financial statements, said the person with knowledge of the current bid. The company is scheduled to report results this week. A successful suitor would gain control of Onyx’s blood-cancer treatment Kyprolis, which it sells alone and whose sales may surge about ninefold to $2.4 billion by 2019, according to analyst estimates compiled by Bloomberg.
“This looks like Amgen is last man standing and this is probably pretty close to the final price,” said Michael King, a JMP Securities senior biotech analyst in New York. “If there was a third party, they would have either stepped in or the price would be higher,” he said in phone interview. King has an equivalent to a hold rating on the stock.
Onyx closed at $132.02 in New York today, giving the company a market value of $9.6 billion. The shares rose 1 percent to $133.75 in trading after exchanges closed.
Lori Melancon, a spokeswoman for Onyx, declined to comment, as did Christine Regan, an Amgen spokeswoman.
AstraZeneca Plc, Pfizer Inc. and Novartis AG were among the suitors preparing bids for Onyx, people familiar with the matter said last month. Onyx said in June that it was working with adviser Centerview Partners.
Onyx also sells Nexavar for liver and kidney cancer in partnership with Germany’s Bayer AG. (BAYN) Onyx generated $362 million in 2012 revenue, with 80 percent coming from Nexavar and Stivarga. The company gets a 20 percent royalty on sales of stomach-cancer treatment Stivarga from Bayer, which has said it expects the drug to be a bestseller.
While Amgen’s $120-a-share bid was 37 percent more than Onyx’s 20-day average before it was disclosed, the stock soared past that price after it became public, signaling investors expected competing offers. Onyx should be valued at $130 to $165 a share in a takeover, according to analysts’ estimates compiled by Bloomberg after Onyx said June 30 it had rejected Amgen’s bid.
In Gilead Sciences Inc.’s takeover of Pharmasset Inc. announced in 2011, Gilead paid 94 percent more than Pharmasset’s average price in the 20 days before the deal was announced, data compiled by Bloomberg show. Applying that premium to Onyx’s 20-day average stock price before the Amgen bid was disclosed would yield an offer for almost $170 a share.
Amgen’s increased offer for Onyx “might be modestly disappointing because there were some people who were holding out for the $140 to $150-type surprises,” King said.
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