M&A watch: Amgen and Onyx haggle over Kyprolis data in stalled buyout talks
Amgen ($AMGN) and Onyx Pharmaceuticals ($ONXX) have become close enough in their buyout negotiations to argue about things. As sources tell Bloomberg, the companies have been stalled in their talks over Amgen's proposed $130-per-share acquisition of Onyx because Amgen wants data from an ongoing trial for European approval of the blood-cancer drug Kyprolis.
|Amgen CEO Robert Bradway|
Onyx shares slid 6% to $116 per share this morning after news of the delay.
Kyprolis, which has U.S. approval for multiple myeloma, is the most prized asset from Onyx and could drive sales of $2.9 billion annually in future years, the news service reported. Yet there's some risk associated with the drug, also known as carfilzomib, because late-stage trials for European approval are ongoing, and unfavorable results could hurt its market potential in the increasingly competitive market for myeloma treatments. Onyx also markets the cancer meds Nexavar and Stivarga with partner Bayer.
The report seems to confirm that Amgen is the leader in the hunt for South San Francisco-based Onyx, which launched a sales process after rejecting the Thousand Oaks, CA-based biotech giant's earlier offer at the end of June. Yet Amgen CEO Robert Bradway is a former Morgan Stanley banker and unlikely to pay more than he must to snap up Onyx. ISI Group analyst Mark Schoenebaum speculates that the snag in the negotiations could center on Onyx's underway Phase III study called FOCUS, which the company last week revealed had not yet reached its endpoint according to an analysis of interim data.
Schoenebaum was skeptical about whether Amgen would seek data from an ongoing trial and compromise its progress. "However, what is probably correct," he wrote in a note this morning, "is that Amgen is using last week's disclosure about the interim analysis in FOCUS to pressure Onyx into accepting a lower price."
|Onyx CEO Tony Coles|
Multiple myeloma is one of the most common forms of blood cancer, and several companies such as Takeda's Millennium and Celgene ($CELG) are vying for market share. Onyx has approval of Kyprolis from the FDA for myeloma patients who have received two or more prior treatments. To hit the big sales numbers in analysts' projections, the company needs to expand the use of the compound in additional patient groups.
Onyx CEO Tony Coles told listeners on his company's earnings call last week that the sales process included "multiple parties," so there's still a possibility that potential suitors such as AstraZeneca ($AZN) could emerge with a better offer.
- check out Bloomberg's article
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