The field of potential Onyx bidders ($ONXX) is beginning to narrow to a handful of likely candidates.
By Reuters' account, Amgen ($AMGN) is still in hot pursuit, with Pfizer ($PFE), Bristol-Myers Squibb ($BMY) and Gilead ($GILD) prowling the sidelines. Novartis ($NVS), Sanofi ($SNY), GlaxoSmithKline ($GSK) and Biogen Idec ($BIIB) have bowed out, according to the same sources. And Royalty Pharma--last seen angling to scoop up Elan--appears to be waiting for one of these bidders to bring it in to help cover the cost, buying part of a royalty stream or two from the Onyx portfolio.
The Wall Street Journal's team, meanwhile, confirms Pfizer's interest and adds Eli Lilly ($LLY) to the not-interested crowd. The Journal also has a source "familiar" with Bayer's thinking on this, and he's saying Bayer isn't likely to step up when the figures are this big. Bayer and Onyx are tied at the hip on a pair of big drugs, but Bayer seems satisfied with what it has in hand--and besides that, the company was never known for high-profile wheeling and dealing.
Bayer is a cautious, one-step-at-a-time company, and it's successfully built its oncology operations with some creative partnerships. On the other hand, Bayer might be persuaded to take on part of the deal for any bidder unwilling to shoulder the full price.
|Onyx CEO Tony Coles|
Pfizer, on the other hand, has successfully whittled billions out of its R&D budget and would be well positioned to add Onyx's cancer drugs to its oncology portfolio.
Onyx CEO Tony Coles is clearly anxious to get at least one other big company to go up against Amgen, which has already started the bidding at $120 a share. Bidding wars make for fat payoffs for investors, and that's the goal here. The market has kept Onyx's shares at around $130, anticipating a premium offer after Onyx slapped down the initial bid.
For now, initial bids are expected this week, according to the news reports, with the auction expected to wrap at the end of the summer.
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