San Francisco Business Times by Ron Leuty, Reporter
Drug developer Onyx Pharmaceuticals Inc.’s stock closed up 9 percent on rumors that longtime partner Bayer AG will soon close a deal to buy the South San Francisco biotech company.
Bayer is zeroing in on a large acquisition, Reuters reported Wednesday. One source told the news agency that Marjin Dekkers, CEO of the German drug maker, is “keen to do something and it could happen within the next couple of days.”
Folks who watch for mergers and acquisitions like Kremlinologists during the Cold War translated that to mean an Onyx deal is brewing on the eve of the local company’s 20th anniversary.
“It’s speculation and rumors,” Onyx spokeswoman Lori Melancon said Wednesday. “We just don’t comment on market rumors.”
Onyx stock closed Wednesday at $47.33 per share -- a 52-week high -- up $3.90 on the day.
Onyx (NASDAQ: ONXX), which could win approval from the Food and Drug Administration on July 27 for the multiple myeloma drug carfilzomib, has long been the source of takeover rumors. It reportedly brought in investment bankers last fall, and in October it settled a lawsuit with Bayer over the cancer drug regorafenib.
As part of the settlement, Onyx would receive a 20 percent royalty on reforafenib oncology sales.
Onyx also paid Bayer $160 million for the Japan rights to the liver and kidney cancer drug Nexavar, the drug that launched the two companies’ collaboration several years ago.
All of those factors seem to point in the direction of an Onyx-Bayer linkup.
But as I noted in February story about Onyx’s growth, the company and President and CEO Tony Coles are walking and talking like an independent company. For one, Onyx has inked a lease for 90,000 square feet in a new building next to its headquarters on East Grand Avenue.
The foundation for that structure is built, framing will begin soon and Onyx is planning a small ceremony in the next few weeks.
Any takeout of Onyx would be a high-priced one. Its cash alone is approaching $670 million and Nexavar is a blockbuster drug sold in more than 100 countries that last year brought in $287 million. (Bayer and Onyx split Nexavar revenue.)
Meanwhile, carfilzomib could win approval this year and regorafenib is in waiting as Onyx and Bayer earlier this month reported strong data from a Phase III trial of regorafenib in patients with gastrointestinal stromal tumors.