Onyx Pharmaceuticals: Inevitable buyout?

Onyx Pharmaceuticals: Inevitable buyout target?

2011: $268 million
2010: $186 million
As a percentage of revenue: 60%
Research chief: Ted Love

If you had to put your finger on the one big reason why Onyx's ($ONXX) R&D budget jumped last year, you'd find yourself stabbing the late-stage carfilzomib study. Despite the biotech's inability to land a priority review process for the multiple myeloma drug, a number of analysts give Onyx a solid shot at gaining an approval by the July 27 PDUFA date, which would validate all the work and money that's been put into it. Executive Editor Ryan McBride selected the drug as one of FierceBiotech's Top 10 Late-Stage Cancer Drugs this year.

By the time you get this far down the list of R&D budgets, you're in the land of inevitable buyout targets. That has certainly been the case for Onyx, especially since its longtime partner Bayer reportedly began an intense round of talks with an undisclosed target recently. The "imminent" deal that Reuters reported in April, though, so far has not panned out.

A deal would make sense for lots of reasons. Last fall Onyx brought in advisers to help review its prospects. The biotech also won a 20% stake and a big payday on its claims that Bayer's promising regorafenib--also in Phase III--looks remarkably similar to Nexavar, on which they are partnered.

Carfilzomib would add significantly to Onyx's value. Originally developed at Proteolix, a biotech run by Susan Molineaux, Onyx acquired it in an $851 million deal. Onyx also lists PD 0332991, a mid-stage drug, in its pipeline.

Onyx has plenty on its plate to boast about. So this time the time may be ripe for a takeover.

Onyx Pharmaceuticals: Inevitable buyout?
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