Onyx Pharmaceuticals Inc. (ONXX) is expecting takeover interest
from roughly five parties including Amgen Inc. (AMGN) and Pfizer
Inc. (PFE), according to people familiar with the matter, as the
cancer-drug developer seeks to drum up demand in an acquisition
that could be valued at more than $10 billion.
Onyx and its advisers asked interested parties for initial
offers by this past Friday, though bids are expected to come in
after that date too, according to the people. One person said
bidders who put in offers that are high enough are expected to get
access to Onyx's confidential information to help them formulate
binding offers.
It isn't clear if early interest will evolve into firm bids;
expressing interest costs a company little and enables it to look
at a rival's confidential information.
Onyx late last month put itself up for sale after rejecting an
unsolicited acquisition offer from Amgen that valued the company at
$120 a share, or some $8.7 billion based on the number of shares
outstanding. Onyx's principle attraction is its blood-cancer
treatment Kyprolis, which could be appealing to pharmaceutical and
biotechnology companies looking for access to new cancer
medications.
Amgen is still eager to buy Onyx, according to people familiar
with the matter. It's unclear how much competition it ultimately
will have. One factor that could discourage competing offers is the
current share price of Onyx, which has surged to more than $130 on
expectations the company will be sold at a price well above Amgen's
opening bid. Companies often insist on a premium to their current
share price in a sale.
In addition, a number of large banks that have been seeking to
advise or fund Onyx or one of its suitors still don't appear to
have landed roles. That could suggest a lack of broad interest in
the company at this price, or it simply could be that suitors are
proceeding without banks at this point.
Indeed, there has been a scramble among unattached banks to get
added to Amgen's roster--a sign many believe the California biotech
is the horse to beat. One large player, Bank of America Corp.
(BAC), did land a role--arranging funding for an Amgen offer,
people familiar with the matter say.
Two companies that have been subject to significant speculation
around a possible deal are Bayer AG (BAYN.XE, BAYRY) and Pfizer,
because of existing ties they have with the South San Francisco,
Calif., company. Onyx has a collaboration and royalty licensing
agreement with Bayer that allows the German drug company to share
in the profits of two cancer drugs. It also has rights to an
experimental cancer treatment being developed by Pfizer.
Pfizer is considering its options with regard to Onyx, according
to people familiar with the matter.
Bayer is unlikely to participate in the auction, in part because
it finds the price too rich, according to a person familiar with
the company's thinking. Another possible suitor that had considered
an offer for Onyx but already has decided not to proceed is Eli
Lilly & Co. (LLY), some people familiar with the matter
said.
Onyx shares fell slightly to $130.42 Tuesday, giving the company
a market value of $9.5 billion. Amgen's initial bid valued Onyx
about 38% more than the company's last closing price before it was
disclosed.
Write to Dana Cimilluca at dana.cimilluca@wsj.com, Jonathan D.
Rockoff at jonathan.rockoff@wsj.com and Dana Mattioli at
dana.mattioli@wsj.com
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