Neutral on Onyx Pharma


We recently reiterated our Neutral recommendation on Onyx Pharmaceuticals, Inc. (ONXX). Onyx Pharma is engaged in the development of novel cancer therapies that target the molecular basis of the disease.

Why the Reiteration?

Onyx Pharma has successfully transformed itself from a single-product company to a multi-product company. With two new product launches, Kyprolis and Stivarga, and Nexavar continuing to perform well, Onyx Pharma looks well-positioned. We expect 2013-2014 to be catalyst-rich as the company works on expanding the labels of currently marketed products and progresses with the development of other candidates.

Kyprolis and Stivarga represent significant commercial potential. However, Kyprolis is facing competition from Celgene’s (CELG) Pomalyst. Moreover, Kyprolis revenues were slightly soft during the recently reported second quarter of 2013.

Onyx Pharma has been in the news of late given biotech major Amgen’s (AMGN) interest in acquiring the company. In Jun 2013, Onyx Pharma rejected a $120 per share takeover bid from Amgen. Management stated that the offer significantly undervalued the company. Onyx Pharma is, however, still interested in selling itself and is on the lookout for potential bidders. On its second quarter 2013 conference call, the company announced that it is currently in discussions with several interested parties - we believe an acquisition deal could be announced soon.

Other Stocks to Consider

At present, Biogen Idec (BIIB) looks well-positioned with a Zacks Rank #1 (Strong Buy). Biogen’s recently launched multiple sclerosis drug, Tecfidera, is off to a strong start. Biogen raised its 2013 outlook again. Key products, Avonex and Tysabri, should continue contributing significantly to sales. Tecfidera should help drive long-term growth.

Read the Full Research Report on ONXX

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Read the Full Research Report on AMGN

Read the Full Research Report on BIIB

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