Amgen Agrees to Buy Onyx for $125 Per Share, or $10.4B

Xconomy San Francisco — 

[Updated: 6:15 pm PT] Amgen got what it wanted from Onyx Pharmaceuticals in the end.

The Thousand Oaks, CA-based biotech giant (NASDAQ: AMGN) said today it has agreed to acquire South San Francisco-based Onyx Pharmaceuticals for $125 a share in cash, for a total value of $10.4 billion. Amgen said it is making a tender offer to Onyx shareholders, and expects the deal to close at the beginning of the fourth quarter once it is cleared by regulators. Amgen said the deal should boost its profits by 2015.

The deal marks the end of a summer of speculation about Onyx (NASDAQ: ONXX), as the company initially passed up a $120 a share offer by Amgen, and started a bidding war among other potential suitors. For a while, Onyx stock traded in the low-to-mid $130s this summer, as investors speculated some other company would step in and pay more for Onyx.

By acquiring Onyx, Amgen is getting ahold of one of the most coveted mid-sized cancer drug development organizations in the industry. Onyx won FDA approval 13 months ago for the multiple myeloma drug carfilzomib (Kyprolis). It also has part ownership, along with Bayer, of two other cancer drugs on the market—sorafenib (Nexavar) and regorafenib (Stivarga). Many analysts are also excited about a Pfizer compound in clinical trials, called palbociclib, which Onyx stands to collect royalties on, should it reach the market.

Onyx generated $362 million in sales last year, and has grown to about 930 employees. [Updated employee number.]

“We believe that Amgen is ideally suited to realize the full potential of Onyx’s portfolio and pipeline for the benefit of physicians and patients,” said Robert Bradway, Amgen’s chairman and CEO, in a statement.

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

Onyx CEO Tony Coles said: “After a careful and thorough evaluation process, our Board of Directors has determined that the all-cash transaction with Amgen maximizes value for our stockholders and expands the potential of our commercial medicines and clinical pipeline to reach more patients globally.”

Amgen plans to hold a conference call to discuss the transaction at 8:30 am ET/5:30 am PT on Monday.