Onyx Pharmaceutical Drops After Buyout Talks Stall

Jacob Harper  |

Onyx Pharmaceuticals Inc. (ONXX) has been going back and forth with Amgen Inc. (AMGN) over a possible buyout for some time. On June 30, Onyx rejected a bid that valued the company at $120 a share, saying they were worth considerably more.

On Aug. 6, Amgen, who is the largest biotech company in the world, sweetened the deal considerably, and it seemed as though an agreement between the two drug companies was nearing completion, with the rumored price at $130 a share or $9.5 billion. A massive revenue beat on Aug. 8 buoyed the assertion that Onyx was worth the higher price, and it seemed Amgen's offer would almost certaintly be accepted.

But the talks have a hit a new snag that has nothing to do with share price. Amgen is requesting data from a study designed to get an injectable blood cancer drug approval in Europe. Onyx doesn’t want to release the study yet, saying it’s not done, and that releasing it early could hamper approval chances.

The drug in question, Kyprolis, is expected to have a major breakout as it is distributed more widely. Although the drug only sold $61 million in the second quarter of 2013, it is expected to have $1 billion in sales by 2016 and $2.4 billion in 2019. Kyprolis is protected under patent until 2015.

Deutsche Bank, who had previously put a price target of $148 on Onyx, lowered their expectations to $140 a share and reiterated the stock's “hold” rating. Shares have a consensus price target of $131.

Spokeswomen for both companies declined to comment on the status of the buyout talks.

Amgen was not affected significantly by the news; their stock is down .88 percent to hit $105.76 a share. Onyx was down 7.16 percent amid five times normal volume to hit $115.34 a share.

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