Report: AstraZeneca, Pfizer, Novartis home in on Onyx bids

Which Big Pharmas are still in the hunt for Onyx Pharmaceuticals ($ONXX)? Try AstraZeneca ($AZN), Novartis ($NVS) and Pfizer ($PFE), Bloomberg's sources say. And Amgen ($AMGN), which triggered the whole bidding process with an unsolicited offer last month, hasn't given up on making another try.

According to Bloomberg, all four companies may make first-round bids this week. Amgen is doing due diligence now, and AstraZeneca, Pfizer and Novartis have all signed confidentiality agreements and hired financial advisers, the news service says. That's the latest lineup anyway; last week, Reuters reported that Pfizer had backed out of the running, citing its own sources.

Indeed, the bidding for Onyx has been up for intense speculation since the company rebuffed an offer from Amgen at $120 per share. The shares immediately skyrocketed, so much so that the Securities and Exchange Commission (SEC) is already investigating potential insider trading. Right now, Onyx shares are trading at around $129, which would put Onyx's market value at about $9.4 billion, the news service notes.

Why would any of these companies pay upward of $10 billion for Onyx? Products. AstraZeneca in particular could use the additional cash flow from Onyx's new blood-cancer treatment Kyprolis, which it markets on its own. And then there are the royalties on drugs it markets in partnership with Bayer--the liver cancer treatment Nexavar and stomach cancer therapy Stivarga.

AstraZeneca CEO Pascal Soriot has deemed cancer one of the company's key treatment areas as it rebuilds from generic competition for the now-off-patent antipsychotic, Seroquel, and readies for the loss of patent protection on the stomach blockbuster Nexium. Soriot has also been making deals, but so far he has focused more on filling his pipeline than on refilling sales gaps. It may be time to change that.

For Novartis, adding Kyprolis to its roster of products would help create a sort of triumvirate in blood cancer. The Swiss drugmaker's Gleevec is a leading leukemia treatment, and it's developing a drug for multiple myeloma. And as Bloomberg points out, buying Onyx would give Pfizer full control of palbociclib, an experimental breast cancer treatment.

- read the Bloomberg news

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