Thu, Mar. 5, 8:52 AMAbbVie's high-priced takeout of Pharmacyclics bodes well for other biotechs with high potential drugs
- AbbVie's (NYSE:ABBV) extraordinarily generous buyout of Pharmacyclics (NASDAQ:PCYC) is a crystal clear example of how keen big pharma is to boost its prospects with biotech drugs with blockbuster potential. The transaction's $20B tab, backing out PCYC's $1B cash balance, values Imbruvica (ibrutinib) at $40B since Pharmacyclics' commercial partner Johnson & Johnson (NYSE:JNJ) gets 50% of Imbruvica's revenue. This implies a multiple of almost 7x Imbruvica's projected peak sales of $6B. By comparison, Amgen's (NASDAQ:AMGN) takeout of Onyx Pharma and Sanofi's (NYSE:SNY) takeout of Genzyme were both at 5x premiums.
- The looming patent expiration for Humira ($12.5B in sales the past four quarters) undoubtedly provided AbbVie extra incentive to get the deal done.
- Adding 50% of Imbruvica's sales to AbbVie's top line should increase its revenue growth 3 - 7% and EPS growth 8 - 11% through 2020.
- According to RBC analyst Michael Yee, other biotechs on the big ticket acquisition radar are: BioMarin Pharmaceuticals (NASDAQ:BMRN), Dyax (NASDAQ:DYAX), Esperion Therapeutics (NASDAQ:ESPR), United Therapeutics (NASDAQ:UTHR), Vertex Pharmaceuticals (NASDAQ:VRTX), Intercept Pharmaceuticals (NASDAQ:ICPT), Juno Therapeutics (NASDAQ:JUNO), Kite Pharma (NASDAQ:KITE), PTC Therapeutics (NASDAQ:PTCT) and Receptos (NASDAQ:RCPT).
May 22, 2014, 7:44 AM
- Roman Abramovich's investment company, Millhouse LLC and OAO Pharmstandard buy a majority share of Russian biosimilar manufacturer Biocad. Millhouse will own 50%, Pharmstandard 20% and Biocad founder and CEO Dmitry Morozov will own 30%. The purchase price is undisclosed but the firm is valued at ~$1B according to a source close to the matter.
- Pfizer (PFE) and Amgen (AMGN) reportedly had interest in the firm.
- Biocad is currently recruiting patients for clinical studies of copies of Roche's (RHHBY) Rituxan, Herceptin and Avastin. The firm also cancer chemotherapies, a drug for genital infections and three drugs for viral infections.
Aug. 28, 2013, 6:50 PM
- Fitch follows Moody's lead, lowering its outlook on Amgen (AMGN) to negative from stable on the back of its recent deal to buy Onyx Pharmaceuticals (ONXX) for around $10.4B in cash.
- Fitch says AMGN's leverage is going to increase significantly because of the acquisition, by at least $8B.
- To pay for the deal, AMGN is taking out $8.1B of five-year loans and paying an average interest rate 104 basis points above the three-month London Interbank Offered Rate - despite the fact that it's sitting on $22B in cash.
- Why? Because of a quirk in the U.S. tax system in which companies' foreign earnings are taxable in the U.S., but only once they are repatriated to the parent.
- Companies sitting on large amounts of cash can cut their tax bills by keeping income offshore in lower-tax countries. As a result, American companies - like Amgen - are holding a lot of cash offshore, but cash poor at home - which in AMGN's case leads to higher leverage and lower credit ratings.
Aug. 26, 2013, 3:23 AM
- Amgen (AMGN) is paying $10.4B, or $9.7B excluding Onyx's (ONXX) cash, making it the fifth-largest biotechnology deal in history. The $125-a-share offer represents a 4.2% increase from Amgen's $120 bid in June. Onyx closed at $116.96 on Friday.
- By buying Onyx, Amgen is gaining full rights to Kyprolis, a potential blockbuster treatment for multiple myeloma, revenue from liver and kidney cancer drug Nexavar, royalties on Bayer's colon cancer medicine Stivarga, and prospective future payments on a breast cancer drug that Pfizer is developing.
- The deal comes as safety fears have hit sales of Amgen's flagship anemia drugs, Aranesp and Epogen, and ahead of a patent cliff starting in 2015 in which four of the company's five top-selling products are due to lose patent protection. (PR)
Aug. 25, 2013, 5:52 PM| 3 Comments
Aug. 24, 2013, 3:54 PM
- The paper adds a deal could be "announced as soon as Monday," but cautions "talks are ongoing and could still fall apart."
- The reported price would represent a 7% premium to Onyx's (ONXX) Friday close of $116.96.
- Amgen (AMGN) reportedly revised its bid from a prior $130/share after failing to obtain trial data related to Onyx's Kyprolis blood-cancer drug. The company is still paying a steep 10.5x 2014E sales.
- More on Amgen/Onyx
- Update: The WSJ also reports a $125/share deal is close. Its sources think a deal "is likely to be announced Monday, if not sooner."
Aug. 23, 2013, 11:38 AM
- It looks like Amgen (AMGN -1%) is in fact pushing for a price tag lower than the $130 a share it offered this month for Onyx Pharmaceuticals (ONXX -0.4%).
- The spat over access to trial data on Kyrpolis looks like it hasn't been resolved. Reports earlier this week suggested that the dispute over access to data on Kyprolis had been taken care of, with ONXX agreeing to provide the information. However, ONXX has apparently balked, saying the data pertains to sensitive patient data.
- Amgen hasn't put a new offer on the table yet and is considering its next move.
Aug. 22, 2013, 3:01 PM
- Amgen (AMGN +1.7%) may be pushing for a lower price in its prospective bid for Onyx (ONXX +1.7%) according to people familiar with the matter, Bloomberg's Meg Tirrell says.
- Many assumed the deal would get done at $130/ share until a dispute over Kyprolis data derailed the process.
- ONXX has since given AMGN (and others apparently) access to the data.
Aug. 22, 2013, 3:02 AM
- Onyx Pharmaceuticals (ONXX) has reportedly provided data from the Phase III trial of its blood-cancer drug Kyprolis to Amgen (AMGN) and other potential acquirers, removing a stumbling block that had caused talks to stall.
- Amgen is in advanced negotiations to buy Onyx for $9.5B and had asked for the information to better assess the medicine, which is seen as a potential blockbuster, while AstraZeneca (AZN) has also held discussions about a deal.
- Onyx had been reluctant to provide the data, as the trial of Kyprolis is still ongoing.
Aug. 19, 2013, 3:24 PM
- With each passing day, the market seems to get more nervous about the prospects for a deal between Onyx Pharmaceuticals (ONXX -4.6%) and Amgen (AMGN -0.3%).
- ONXX shares are off substantially on the session as speculation continues to swirl surrounding a rumored disagreement between the two firms regarding Kyprolis trial data.
- ISI's Mark Schoenebaum is out with new commentary on the proposed deal, saying AMGN may now exercise a bit more discipline regarding price and due diligence.
- Nevertheless, a deal is more likely than not despite the abundance of what Schoenebaum calls "posturing."
Aug. 14, 2013, 11:07 PM
- Discussions between Amgen (AMGN) and Onyx Pharmaceuticals (ONXX) have stalled due to ONXX's unwillingness to turn over data from an ongoing study of Kyprolis.
- ONXX "doesn’t want to obtain results before the study is done as it may slow the approval process," Bloomberg says, citing people familiar with the matter.
- If the dispute can be resolved, a deal could materialize in short order, as the two sides are reportedly in agreement on price ($130 per ONXX share).
Aug. 6, 2013, 4:06 PM
Jul. 22, 2013, 12:27 PM
Jul. 2, 2013, 2:47 AMHaving turned down Amgen (AMGN), Onyx Pharmaceuticals (ONXX) is reportedly attracting acquisition interest from a number of other large drug companies, including Pfizer (PFE), which has licensed the palbociclib breast-cancer drug from Onyx and is due to pay royalties of 8% on it, and Novartis (NVS), which has a strong lineup of cancer treatments. It's also worth noting that Onyx has a partnership with Bayer (BAYZF.PK) to sell two drugs for liver, kidney and colon cancer. | Comment!
Jul. 1, 2013, 8:16 AMOnyx (ONXX) shares rocket 51% to $130.98 after the company says that it's rejected a $120/share offer from Amgen (AMGN +0.6%) and that it's seeking buyers after receiving inquiries. There's no shortage of speculation about who could acquire Onyx, with Bayer (BAYZF.PK), Celgene (CELG), Novartis (NVS), Bristol-Myers (BMY), AstraZeneca (AZN), Eli Lilly (LLY), Gilead (GILD) and Pfizer (PFE) all mentioned. However, Forbes' Matthew Herper notes that potential blockbuster blood-cancer drug Kyprolis has only received accelerated FDA approval, which can be revoked. Big Pharma may have wanted to await further trial results later this year amid concerns about Kyprolis' safety. | 2 Comments
Jun. 27, 2013, 7:26 AMPfizer (PFE) and Amgen (AMGN) are reportedly two of three remaining bidders for Russian biotechnology company Biocad, which could be worth $750M-$1B. Biocad develops biosimilars, or copies of branded drugs. The company has already partnered Pfizer on projects, including on a hemophilia treatment. | Comment!
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