Onyx Pharmaceuticals Inc. (ONXX) shares rose over 50 percent on Monday after the company rejected a $120 per share takeover bid from Amgen Inc (AMGN). Although the bid was 30 percent higher than Onyx’s share price at Friday’s close, Onyx believes that the bid significantly undervalues the company.
As a result, Onyx intends to actively seek out a buyout at a higher price. “We are actively exploring the potential to combine Onyx with another company as an option to create additional value for Onyx shareholders,” said Chairman and CEO Anthony Coles.
The San Francisco-based Onyx produces Kyprolis, an injectable proteasome inhibitor for multiple myeloma, and Nexavar, an oral treatment for liver and kidney cancer. The company also has a number of drugs undergoing phase III trials.
With two highly successful drugs on the market and others in the pipeline, Wall Street appears to agree that Onyx could sell for more than $120 per share to another big pharmaceutical company. According to Forbes, Deutsche Bank forsees a $148 per share price tag, while Geoffrey Porges of Sanford C. Bernstein believes Onyx fetch up to $180.
The news sparked broad gains in the entire pharmaceutical industry, as investors contemplated if other pharmaceutical stocks could be undervalued and ripe for a takeover. Most notably, the Nasdaq Biotechnology Index (NBI) rose 3.53 percent, Ariad Pharmaceuticals (ARIA) jumped 13.72 percent, and Isis Pharmaceuticals (ISIS) rose 7.29 percent to reach multi-year highs, among many other big gainers.
Shares of Onyx reached all-time highs during trading hours on Monday, trading for as much as $132.98 on Monday morning.
[Image via Nasdaq]
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