Shares of biotech leader Amgen (AMGN) surged more than 7% in Monday morning trading after the company announced that it would purchase cancer drug maker Onyx Pharmaceuticals (ONXX). Onyx shares climbed more than 5% on the news.
Amgen will pay $125 a share for Onyx, pricing the all-cash deal at about $10.4 billion, making it one of the largest acquisitions in the biotechnology sector. It is also Amgen’s second largest purchase after its 2002 acquisition of Immunex for $17 billion, the New York Times notes.
U.S. regulators will have to grant approval for the merger. The deal is expected to be completed during the fourth quarter.
Two months ago, Amgen offered a $120-a-share bid for Onyx, but that bid was rejected. Analysts had expected Amgen to bid again, but had predicted a $130-a-share proposal for the second round. Amgen has very little presence in the lucrative cancer drug market.
Onyx received regulatory approval for a new treatment for multiple myeloma last year. The drug is expected to eventually generate annual sales of $2 billion.