Amgen ($AMGN) struck the deal of the summer last month with the $125-per-share buyout of Onyx Pharmaceuticals ($ONXX), and a regulatory document today reports the back-and-forth between the two companies and other parties. Amgen CEO Robert Bradway emerges as the Cool Hand Luke of the M&A story.
In review, Amgen sparked the buyout fever at Onyx this summer with its $120-per-share offer for the cancer drug specialist in June. After Onyx CEO Tony Coles and the board rejected Amgen's bid, the company launched a process that drew several other interested parties. According to an SEC filing, Amgen later came back with a proposal to buy Onyx for $130 per share under certain conditions.
The only thing was that Bradway and Amgen's bankers were pushing for Onyx to reveal interim data from its Phase III "Focus" study, thus "unblinding" the study of Onyx's Kyprolis for multiple myeloma. If Kyprolis stays on track, analysts expect the drug to hit $3 billion in annual sales in future years. Yet keep in mind, as Onyx points out, that the company could have faced some heat with regulators as well as investors for revealing this interim data from the Focus study to any third party. Who would ask Onyx to do such a thing?
Well, Bradway. Also, after Onyx broke the news to Amgen's CEO that the company had decided not to "unblind" the Focus study to furnish his data request, Amgen decided to shave $9 off its next buyout number. Coles and his advisers quickly rejected $121-per-share from Amgen, but they were clearly staying in negotiations with Bradway & Co. Amgen eventually got Onyx to accept $125 per share, which was the best cash offer on the table and a 44% increase from the price of Onyx before Amgen's initial offer of $120 per share became public in late June.
ISI Group analyst Mark Schoenebaum had been skeptical after Bloomberg reported leaked info last month that Amgen had been pushing for Onyx to hand over interim data from the Focus study. The request was that unorthodox. And today the analyst tipped his hat to Bradway, speculating that the "poker move" was made with the understanding that Onyx would never reveal such data to Amgen but could bring its asking price down.
This seems to be exactly what happened based on all the details from the SEC filing, with Bradway flexing his old negotiation muscles from his past years as an investment banker at Morgan Stanley.
- check out the filing
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