By Soyoung Kim and Jessica Toonkel
NEW YORK, Aug 7 (Reuters) - Onyx Pharmaceuticals Inc isclose to selling itself to larger rival Amgen Inc as the cancerdrugmaker's high stock price has discouraged other companiesfrom making a counteroffer so far, according to three peoplefamiliar with the matter.
Amgen, the world's largest biotechnology company,is in advanced discussions to buy Onyx, with the twosides working toward a possible announcement as soon as withinthe next week, the sources said on Wednesday.
Terms of an agreement have yet to be finalized, but thecompanies are negotiating a price of $130 per share, or nearly$9.5 billion based on shares outstanding. Onyx has indicated itwould likely accept a deal at that price, the sources said.
Discussions could still fall apart, and there was noguarantee an agreement will be reached, according to thesources, who asked not to be identified because the matter isconfidential.
Shares of Amgen jumped 6.8 percent to $112.40 on news of alikely deal, hitting their highest level since April. Onyxshares fell almost 3 percent to $128.21.
Representatives of Amgen and Onyx declined to comment.
A few other drugmakers including AstraZeneca Plc have also evaluated a deal in recent weeks but it wasunclear if a rival bid would emerge, one of the people said. AnAstraZeneca spokeswoman said the company does not comment onmarket speculation.
A deal at $130 per share would be about 8 percent higherthan Amgen's initial offer of $120 per share. Onyx's boardrejected that bid as too low in late June.
Before the move on Wednesday, Onyx's stock had surged morethan 50 percent from the closing price of $86.82 on June 28, thelast trading price before the sale process was reported.
The steep price gains, as well as the floor price that Amgenhas set with its initial $120 per-share offer, deterred severalpharmaceutical and biotechnology companies that would otherwisehave been interested in bidding, people familiar with the mattersaid previously.
South San Francisco, California-based Onyx sells Nexavar, atreatment for liver and kidney cancer, and the new colon cancerdrug Stivarga - both in partnership with Germany's Bayer AG. Onyx last year began selling Kyprolis for multiplemyeloma, which some analysts estimate will reach peak annualsales of $3 billion.
Cancer medicines are the holy grail for many drugmakersbecause current products have limited effectiveness and thecompanies can charge huge prices for new biotech treatments.
Thousand Oaks, California-based Amgen has faced growingpressure to beef up its drug development pipeline as safetyconcerns have trimmed sales of its flagship anemia drugs, whilepatents on four of its five top-selling drugs are set to expire,starting in 2015.
The company is best known for these and other medicines usedfor cancer patients.
Astrazeneca (AZN)
Barclays (BARC)
