12:30 p.m. | Updated Onyx Pharmaceuticals said on Sunday that it is weighing a sale of itself, after having rejected an unsolicited $8.7 billion takeover bid by Amgen last week as too low.
The company said in a statement that Amgen had proposed paying $120 a share in cash, a 38 percent premium to Onyx’s closing price on Friday. The biopharmaceutical drug maker said that it has hired the investment bank Centerview Partners to contact possible suitors.
Big drug manufacturers have shown an appetite for biopharmaceutical companies, hoping to use their specialized products to refill their product pipelines as older offerings face presure from generic competitors.
Onyx sells or helps sell three cancer drugs, two of which won approval in 2012, broadening its portfolio and making it more attractive to potential acquirers.
Its oldest drug, which it sells with Bayer, is Nexavar, which is approved to treat liver and kidney cancers. Last year, Bayer won approval for Stivarga to treat colorectal cancer. Onyx helps sell that drug in the United States and gets a royalty on global sales.
Onyx also won approval last year for its first wholly owned drug, a treatment for multiple myeloma called Kyprolis.
“Onyx has tremendous momentum and, with the expansion of our pipeline and two successful product launches, the company and our talented employees have created significant value for Onyx shareholders,†N. Anthony Coles, Onyx’s chairman and chief executive, said in a st! atement. “We are actively exploring the potential to combine Onyx with another company as an option to create additional value for Onyx shareholders.â€
In 2012, Onyx had total revenue of $362.2 million and a net loss of $187.8 million using generally accepted accounting principles. Onyx’s share of the revenue from Nexavar was $288.4 million, about the same as the year before. Sales of Kyprolis, which was approved in July, were $64 million.
While Kyprolis is considered Onyx’s best growth prospect in the near term, a possible hidden gem for the company is that it is entitled to an 8 percent royalty on a drug now being developed by Pfizer that has shown extremely promising early results in treating breast cancer, though more study is needed.
Mark Schoenebaum, an analyst with ISI Group, said the Pfizer drug, palbociclib, could reach the markt in 2015 to 2017 and reach global sales of over $2 billion, and perhaps much more.
For Amgen, buying Onyx would expand its reach into cancer drugs, a priority for the company. The world’s biggest biotechnology company by sales, Amgen already sells various drugs for use in treating cancer patients.
But many of them treat side effects of chemotherapy rather than directly attacking the tumor, as Onyx’s drugs do.
A representative for Amgen wasn’t immediately available for comment.
