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Aug 26, 2013

Amgen Grows Cancer Holdings with $10.4B Onyx Acquisition

  • Amgen ended weeks of speculation in biopharma circles yesterday when it said it plans to acquire Onyx Pharmaceuticals for $10.4 billion. The deal strengthens Amgen’s cancer holdings by adding to them Onyx’ multiple myeloma drug Kyprolis® (carfilzomib) and two other drugs for oncology indications also on the market, while boosting Amgen’s pipeline with several other clinical-stage cancer compounds.

    The boards of both Amgen and Onyx have approved the deal, which is still subject to customary closing conditions, including clearance by regulatory agencies. Amgen said in a statement it “expects to close [the acquisition] at the beginning of the fourth quarter.”

    "We believe that Amgen is ideally suited to realize the full potential of Onyx' portfolio and pipeline for the benefit of physicians and patients," Robert A. Bradway, Amgen’s chairman and CEO, said in the statement. “We expect this acquisition will accelerate growth and enhance value for Amgen shareholders."

    Bradway added: “Amgen has a unique opportunity to add value to Kyprolis, a product which is at an early and promising stage of its launch.”

    Onyx holds global rights excluding Japan to Kyprolis for Injection, which is already approved in the U.S. There, Kyprolis has an orphan drug designation with exclusivity until July 2019, as well as patents that extend until at least 2025.

    Onyx has clinical trials under way in support of an expected European Union filing in 2014. Amgen’s effort to gain access to data from those trials was reported to have been a sticking point holding up an agreement between the companies—a sticking point resolved days ago when Onyx finally granted such access to Amgen and other potential bidders for the company, Reuters reported last week, citing unnamed sources.

    Kyprolis is projected to generate more than $3 billion a year by 2021, according to analyst estimates compiled by Bloomberg.

    In addition, Onyx has the following cancer drugs developed with partners, two of which are already being marketed:

    • Nexavar® (sorafenib) tablets, approved in more than 100 countries for patients with hepatocellular carcinoma and advanced renal cell carcinoma. Nexavar is an oral kinase inhibitor of Onyx and Bayer HealthCare Pharmaceuticals, and is co-developed by the companies except in Japan where Bayer manages all development. The companies co-promote Nexavar in the U.S. Outside of the U.S., Bayer has exclusive marketing rights, and Bayer and Onyx share profits globally, excluding Japan.
    • Stivarga® (regorafenib) tablets, indicated for metastatic colorectal cancer (CRC) patients previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF therapy, and, if KRAS wild type, an anti-EGFR therapy; as well as for locally advanced, unresectable or metastatic gastrointestinal stromal tumor (GIST) previously treated with imatinib mesylate and sunitinib malate. Stivarga was developed by Bayer and is jointly promoted by Bayer and Onyx in the U.S. Onyx receives a 20% royalty on all global net sales of Stivarga in oncology.

    Onyx also has multiple oncology compounds in various stages of clinical development, including the Phase III oral, small molecule cyclin-dependent kinase 4/6 inhibitor Palbociclib (PD-0332991), a compound being developed by Pfizer. Earlier this year it won FDA’s breakthtrough therapy designation based on preliminary Phase II data showing improvement in median progression-free survival in combination therapy. Onyx will receive an 8% royalty on future worldwide sales of palbociclib.

    At $125 a share, Amgen’s acquisition represents a 44% premium on the $86.84 closing price of Onyx shares on June 28, the last full trading day before speculation surfaced about Amgen’s interest in snapping up the Kyprolis developer. Amgen offered $120 per share for Onyx in June, but Onyx rejected that offer as significantly undervaluing the company and instead solicited bids from multiple would-be buyers.


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