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Amgen to add cancer drugs with Onyx purchase

Amgen expects to complete its $10.4 billion purchase of Onyx Pharmaceuticals at the start of the fourth quarter.

Paul Sakuma/Associated Press/file

Amgen expects to complete its $10.4 billion purchase of Onyx Pharmaceuticals at the start of the fourth quarter.

NEW YORK — The biotech drug maker Amgen will buy the cancer drug maker Onyx Pharmaceuticals for about $10.4 billion in cash in a deal that will add several cancer drugs to Amgen’s stable and put more new drugs in its pipeline.

Amgen Inc. said Sunday that it will acquire Onyx for $125 per share. It expects to complete the deal at the beginning of the fourth quarter. The companies value the deal at $9.7 billion, excluding Onyx’s cash. Amgen said it will use $8.1 billion in committed bank loans to finance the deal.

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In June, Onyx rejected an offer from Amgen worth $120 per share.

Amgen is the biggest biotech drug company in the world. Its products include Prolia for osteoporosis, Enbrel for rheumatoid arthritis and skin disorders, and Neulasta and Neupogen for fighting infection in cancer patients. The Thousand Oaks, Calif., company reported $17.27 billion in revenue in 2012. It said Onyx will start adding to its adjusted net income in 2015.

Onyx Pharmaceuticals Inc. makes two cancer drugs through a partnership with Bayer AG. Sales of Nexavar, a pill to treat liver and kidney cancer, totaled $861 million in 2012. Onyx received $288 million in revenue from those sales. Stivarga was approved in September as a treatment for colorectal cancer and won additional approval in February for use against tumors of the intestinal tract that did not respond to other treatments.

In July, the FDA approved Onyx’s Kyprolis as a treatment for multiple myeloma, a type of blood cancer.

Multiple myeloma causes tumors to grow in the bone marrow, preventing the production of normal blood cells. The FDA approved Kyprolis for patients who already have been treated with at least two other multiple myeloma drugs, and Onyx is conducting other trials to win broader marketing approval. Onyx and Bayer are also testing Nexavar as a treatment for breast cancer.

The new offer comes at a 44 percent premium to Onyx’s closing price on June 28, before reports of Amgen’s initial bid. In the days after Amgen’s first offer was made public, shares of the South San Francisco company climbed as high as $136.87. The stock closed at $116.96 Friday.

The Onyx drugs would add to Amgen’s pipeline of new drugs. In the first half of 2014 Amgen expects to announce late-stage testing data for three experimental drugs. The products are being studied as treatments for skin cancer, recurrent ovarian cancer, and high LDL, or bad cholesterol, that doesn’t respond to pills such as Lipitor.

Onyx and Pfizer Inc. are also studying a drug called palbociclib to treat breast cancer, and oprozomib, a potential multiple myeloma drug that is in early clinical testing.

Several other major pharmaceutical acquisitions have been announced in the past few months. In July, generic drug maker Perrigo Co. agreed to buy Ireland’s Elan Corp. PLC for $8.6 billion. That deal will allow Perrigo to move to Ireland and cut its tax obligations while adding royalties.

In May, the generic drug company Actavis Inc. agreed to buy Warner Chilcott PLC for $8.5 billion in stock, creating the third-biggest specialty pharmaceutical company in the US market.

Also in May, Valeant Pharmaceuticals International Inc. agreed to pay $8.7 billion to buy Bausch + Lomb in a massive expansion of Valeant’s ophthalmology business.

In April, scientific instrument maker Thermo Fisher Scientific Inc. agreed to buy life science and medical research instrument maker Life Technologies Corp. for $13.6 billion.

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