Onyx Pharma rejects Amgen's unsolicited $120 per share takeover offer

Following a day of speculation and rumor on Friday, US biotech firm Onyx Pharmaceuticals (Nasdaq: ONXX) on Sunday issued a statement confirming it has received and rejected an unsolicited proposal from Amgen (Nasdaq: AMGN), the world’s largest independent biotech group, to acquire all of Onyx's outstanding shares and share equivalents for $120 per share in cash, a premium of some 38% to its most-recent closing price, or around $10 billion in total.

Onyx’ board of directors’ with the assistance of its financial and legal advisors, evaluated the proposal and concluded that the price proposed by Amgen significantly undervalued Onyx and its prospects, and was not in the best interest of Onyx or its shareholders. Onyx communicated this determination to Amgen on Friday, June 28. In extended trading that day, Onyx shares rose 28% to $111.04.

Bloomberg noted that Amgen has been seeking new products and expanding its business overseas as sales decline for its anemia drugs Aranesp (darbepoetin alfa) and Epogen (epoetin alfa), which generated revenues of about $4 billion in 2012, or about 23% of the company’s sales. The news service quoted ISI Group analyst Mark Schoenebaum as saying: “Strategically, this deal makes a great deal of sense for Amgen,” which already has a very large cancer franchise, noting, however, none of these drugs are direct anti-tumor agents.”