Amgen Inc is near an agreement to buy Onyx Pharmaceuticals Inc, maker of the cancer drug Kyprolis, for about US$125 a share, people familiar with the matter said.
The US$9.16 billion, all-cash deal may be announced as soon as today, said the sources said. The deal may be valued at as much as US$10.5 billion, due to preferred shares, one source said. The price would be 6.9 percent more than South San Francisco, California-based Onyx’s closing price of US$116.96 on Friday.
Kyprolis was approved last year for some patients with multiple myeloma, and may draw more than US$3 billion in revenue by 2021, according to analysts’ estimates compiled by Bloomberg. The deal would give Amgen a likely boost as Kyprolis sales rise, and bolsters an oncology pipeline that will help expand Thousand Oaks, California-based Amgen’s roster of medicines and increase revenue, the foundation of which are drugs such as Aranesp to combat anemia.
The parties agreed to a lower price after they could not resolve a dispute about Onyx drug data requested by Amgen, said one of the people. Amgen had offered US$130 a share, people said previously.
The price may still change slightly, said one of the people, though it was likely to be close to US$125 per share.
The deal is not finalized and may still fall apart.
Onyx had rejected a US$120-a-share overture from Amgen in June and opened itself up to other bidders. AstraZeneca PLC, Pfizer Inc and Novartis AG had also expressed interest, Bloomberg reported last month.
Onyx also sells Nexavar for liver and kidney cancer in partnership with Germany’s Bayer AG. Onyx generated US$362 million revenue last year, with 80 percent coming from Nexavar and the stomach-cancer treatment Stivarga. The company gets a 20 percent royalty on Stivarga from Bayer, which has said it expects the medicine to be a bestseller.
While Amgen’s original US$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 the offer became public, signaling investors expected competing offers.
A deal valuing Onyx at as much as US$10.5 billion would be the third-largest acquisition of a biotechnology company in the past three years, according to data compiled by Bloomberg. Since August 2010, 62 biotechnology deals valued at US$50 million or more were announced, with an average disclosed price of US$1.29 billion and an average premium of 55 percent, the data show.