Amgen-Onyx Deal: World's Biggest Biotech Firm Gets Bigger

Amgen-Onyx Deal: World's Biggest Biotech Firm Gets Bigger

Amgen-Onyx deal would be worth $10.4 billion, adding several cancer drugs to Amgen's  offerings. Amgen-Onyx expected to be completed in the fourth quarter.

The companies value the deal at $9.7 billion excluding Onyx's cash, and Amgen said it will use $8.1 billion in committed bank loans to finance the deal.

The Thousand Oaks, Calif., company reported $17.27 billion in revenue in 2012.

Onyx Pharmaceuticals Inc. makes two cancer drugs through a partnership with Bayer AG. Sales of Nexavar, a pill that is approved to treat liver and kidney cancer, totaled $861 million in 2012. Onyx received $288 million in revenue from those sales. Stivarga was approved in September as a treatment for colorectal cancer, and won additional approval in February for use against tumors of the intestinal tract that did not respond to other treatments. Onyx and Bayer also are testing Nexavar as a treatment for breast cancer. And Onyx could receive milestone payments and royalties from palbociclib, a drug that Pfizer Inc. is studying as a breast cancer treatment.

In July the FDA approved Onyx's Kyprolis as a treatment for multiple myeloma, a type of blood cancer. Multiple myeloma causes tumors to grow in the bone marrow, preventing the production of normal blood cells. The FDA approved Kyprolis for patients who have already been treated with at least two other multiple myeloma drugs, and Onyx is conducting other trials to win broader marketing approval. Onyx also is developing oprozomib, a potential multiple myeloma drug that is in early clinical testing.

The new offer comes at a 44 percent premium to Onyx's closing price on June 28, before reports of Amgen's initial bid. In the days after Amgen's first offer was made public, shares of the South San Francisco company climbed as high as $136.87.

The Onyx drugs would add to Amgen's pipeline of new medicines. In the first half of 2014 Amgen expects to announce late-stage testing data for three experimental drugs. The products are being studied as treatments for skin cancer, recurrent ovarian cancer and high LDL, or bad cholesterol, that doesn't respond to pills such as Lipitor.