|Onyx Spurs Pfizer Buyout Talk|
|By Staff and Wire Reports|
|Thursday, 01 December 2011 06:06|
While a takeover offer at that price would be costlier for potential buyers than any biotechnology deal of comparable size, Onyx may interest companies such as Pfizer Inc. and Takeda Pharmaceutical Co. as their own drugs lose patent protections, Mizuho and Tullett Prebon Plc said. Onyx, which already sells a kidney-cancer treatment named Nexavar, may get U.S. approval for carfilzomib as early as March, helping it double sales within five years, analysts’ estimates compiled by Bloomberg show.
Drugmakers are “in the market for transactions and new drugs,” Walter Todd, co-chief investment officer at Greenwood Capital in Greenwood, South Carolina, which manages $940 million, said in a telephone interview. “You have huge patent expirations. Cancer is an area that a lot of companies are focused on. Large companies are looking for growth opportunities and these smaller names are going to be attractive.”
Todd said New York-based Pfizer, the world’s largest drugmaker, along with GlaxoSmithKline Plc (GSK) of London, were among companies that could benefit from acquiring Onyx.
Shares of Onyx surged 14 percent on Nov. 28 after two people familiar with the situation, who declined to be identified because the discussions were private, said that the company had hired investment bank Centerview Partners to help it review alternatives.
Potential buyers are studying Onyx’s business and its carfilzomib drug, which treats a cancer of plasma cells known as multiple myeloma, one of the people said.
While Lori Melancon, a spokeswoman for South San Francisco, California-based Onyx, said it doesn’t comment on rumor or speculation, Jefferies Group Inc.’s Biren Amin says the company signaled a willingness to sell itself in October when it settled a lawsuit with Bayer AG over the experimental cancer medicine regorafenib and amended its collaboration agreement for Nexavar.
The amended Oct. 11 agreement now maintains Onyx’s profit- sharing, co-development and co-promotion of Nexavar with Leverkusen, Germany-based Bayer in the event that Onyx, valued at $2.8 billion, is bought, data compiled by Bloomberg show.
Change of Control
“They’re definitely putting themselves out there,” Amin, an analyst at Jefferies in New York, said in a telephone interview. “At the end of the day, most of these small- to mid- cap biotech companies want to sell themselves.”
Onyx could be worth $70 a share to $80 a share in an acquisition, according to an estimate from Gene Mack, a New York-based analyst at Mizuho. Based on Onyx’s average price of $39.39 in the past 20 trading days, a $70-a-share offer would represent a 78 percent takeover premium.
That would exceed the 67 percent premium that ... Read the rest of this story at Bloomberg.