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Onyx up 50 Percent after Rejecting Buyout Offer (ONXX)

Onyx Pharmaceuticals (NASDAQ: ONXX) were up 50 percent near the close of trading Monday after the company announced that it had reject a buyout offer from Amgen (NASDAQ: AMGN) saying the the offer was too low.

According to Onyx, Amgen’s offer of $120 per share significantly undervalues the company. This ignited talk on Wall St. that the company may be looking for bidders willing to pay a higher premium for the biotech firm. Onyx has a robust cancer-focused pipeline making it attractive to larger companies looking to strengthen their oncology pipeline.

Some speculate that Bayer, a company Onyx holds a partnership with, may be interested in acquiring the company but Bayer has made no indication of interest. The company also has a royalty deal for one of its breast cancer compounds with Pfizer (NYSE: PFE).

Investors are waiting to see if Amgen will up its offer or if other companies will try to acquire the company with a higher premium. Although Amgen has a healthy cancer franchise, it doesn’t have any direct anti-tumor agents. This makes Onyx’s portfolio particularly attractive to the company.

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Disclosure: At the time of this writing, the author had no position in the companies mentioned.

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