Exclusive: Pfizer not moving forward with Onyx bid: sources
Thu Jul 18, 2013 4:36pm EDT
By Soyoung Kim
NEW YORK (Reuters) - Pfizer Inc decided not to pursue a bid for Onyx Pharmaceuticals Inc this week, according to two people familiar with the matter, leaving Amgen Inc in the front position to buy the cancer drugmaker.
Shares of Onyx closed down 3.3 percent at $128.55 on Thursday, their lowest level since it announced a sale process on June 30 and valuing the South San Francisco, California-based company at around $9.3 billion.
Onyx, which rejected Amgen's $120 per share bid and instead put itself up for sale, was expecting to receive first-round offers from a few interested parties as soon as this week, people familiar with the matter previously told Reuters.
Pfizer, among the drugmakers that have been evaluating a bid as recently as a few days ago, has decided not to move forward, mainly on concerns that Onyx has become too expensive after a recent run-up in its share price, the people said on Thursday.
The sources asked not to be named because details of the auction are not public. Pfizer, Onyx and Amgen declined to comment.
A few other drugmakers that showed interest, such as Gilead Sciences Inc, Bristol-Myers Squibb Co and AstraZeneca Plc, have also been deterred by price, the people familiar with the matter said, though the companies' latest position could not be confirmed as of Thursday.
Gilead and AstraZeneca declined to comment. Bristol-Myers did not respond to requests for comment.
Shares of Onyx, which closed at $86.82 on June 28 before news of the sale process, have since surged more than 50 percent. The steep price gain already prompted a number of other pharmaceutical and biotechnology companies not to pursue a deal, several people familiar with the matter previously said.
Large pharmaceutical and biotech companies have been looking to acquire smaller biotech firms to gain access to new drugs and offset revenue losses stemming from expired patents, but rich valuations of target companies are proving to be a big hurdle to dealmaking.
Onyx sells Nexavar, a treatment for liver and kidney cancer, and the new colon cancer drug Stivarga - both in partnership with Germany's Bayer AG. Onyx last year began selling Kyprolis for multiple myeloma, which some analysts estimate will reach peak annual sales of $3 billion.
"It's nothing to do with the attractiveness of those drugs. It's just that the price got away from buyers," said a third person familiar with the sale process, asking not to be named because he was not authorized to speak with the media.
(Reporting by Soyoung Kim in New York; Additional reporting by Ben Hirschler in London and Deena Beasley in Los Angeles; Editing by Gary Hill and Tim Dobbyn)