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Onyx Pharmaceuticals, Inc. rejected a $120 per share takeover bid from Amgen Inc. (AMGN - Analyst Report). Management at Onyx while turning down the offer stated that it significantly undervalued the company.

Onyx is however still interested in selling itself and is on the lookout for potential bidders. Even though Onyx stated in its press release that it does not intend to communicate further regarding the $120 per share offer from biotechnology giant Amgen, we believe that it is not the end of the story.

We believe that Amgen will continue to pursue Onyx as the acquisition of the latter will further strengthen Amgen’s presence in the oncology field. We believe that if the deal ultimately goes through it will do so at close to $130 per share. Onyx, a biopharma company, is engaged in the development of novel cancer therapies that target the molecular basis of the disease.

The key drugs at Onyx are Nexavar (hepatocellular carcinoma or liver cancer and advanced renal cell carcinoma or advanced kidney cancer), Stivarga (colorectal cancer and Kyprolis (multiple myeloma). Onyx is working hard to expand the label(s) of its marketed products. Onyx is also developing oprozomib for various oncology indications.

With Onyx open to offers from other bidders, it is also possible that other big players in the biopharma space like Celgene Corporation (CELG - Analyst Report) and Biogen Idec Inc. (BIIB - Analyst Report) express interest in Onyx resulting in a bidding war. We expect investor focus to remain on how the whole process unfolds.

Onyx currently carries a Zacks Rank #3 (Hold). However, companies such as Biogen Idec Inc. look more attractive with a Zacks Rank #1 (Strong Buy).

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