Onyx not precious to Pfizer Inc (NYSE:PFE) anymore
This week, Pfizer Inc (NYSE:PFE) has reverted from its decision of bidding for Onyx Pharmaceuticals. The path is now clear for Amgen and it can move forth with its acquisition plans. Onyx had announced its sell-out plan on 30 June and the company is valued at close to $9.3B. Onyx had rejected the $120/share bid that had been put forth by Amgen. Instead it had gone ahead and put itself on the block. The company was expecting the first round of offers from some interested parties sometime this week said people in the know. Even up until a few days ago, Pfizer has been evaluating a bid but it has decided against the plan.
The primary concern is that after the very recent rise in share price, the company has become too expensive. The auction details are not yet public and all developments are in the initial stages. No comments were forthcoming from PFE, Onyx or Amgen.
Other potential buyers
Drugmakers such as Gilead Sciences Inc, AstraZeneca Plc and Bristol-Myers Squibb Co had shown some interest in Onyx, but the price is a major deterrent for them as well. Even towards the end of last week, there was no additional information about the latest stand that these companies were taking. Both AstraZeneca and Gilead declined any comment and so did Bristol-Myers.
On 28 June, Onyx shares had closed at $86.82. This was prior to the sale process. Since then there has been a surge of over 50% in its share prices. Many people who were previously familiar with the matter said that numerous other biotech and pharma companies had refrained from bidding for the company. The biggies of the pharma industry like Pfizer, gain on various fronts when they acquire comparatively smaller firms. They automatically acquire access to new drugs and also manage to offset all revenue losses that stem from expired patents of their own drugs. The main hurdle in the path of deal-making has been the rich valuations of these smaller target companies.