Amgen agreed to buy Onyx Pharmaceuticals in a $10.4 billion transaction that gives Amgen access to a rapidly expanding cancer-drug market with a new product that offers sure revenue.
Amgen will pay $125 a share for Onyx’s outstanding stock, the companies said in a statement Sunday. Net of estimated Onyx cash, the deal is worth $9.7 billion. Onyx’s Kyprolis, approved last year for a rare blood cancer, may spur more than $3 billion in revenue by 2021, according to analyst estimates. South San Francisco-based Onyx is now studying the medicine in an expanded group of patients.
The accord mirrors recent deals in which drugmakers bought companies with one or two promising products, rather than attempting large mergers that come with whole pipelines or offer business synergies. Kyprolis fills a hole for Amgen in a product line that largely contains drugs to support rather than treat cancer patients, at a time when the oncology market is growing increasingly important as the U.S. population ages.
“It’s a steal for Amgen,” said Ori Hershkovitz, a partner at Sphera Funds Management, a Tel Aviv-based health-care hedge fund that holds both Onyx and Amgen shares.
Amgen rose 7.7 percent to $113.75, the biggest gainer in the Standard & Poor’s 500-stock index on Monday. Onyx gained 5.6 percent, to $123.49.
— Bloomberg News
J.C. Penney’s largest investor and former board member, William Ackman of Pershing Square Capital Management, is selling his nearly 18 percent stake in the struggling department store operator.
The move to sell 39.1 million shares, announced in a regulatory filing Monday, comes two weeks after Ackman resigned from J.C. Penney’s board as part of a deal to resolve an unusually public battle between the activist investor and the company.
The news sent its shares down nearly 3 percent to $13 per share in after hours-trading after closing down 15 cents to $13.35 in the regular session.
The latest development comes as the beleaguered chain is trying to recover from a botched transformation plan spearheaded by former chief executive Ron Johnson that led to disastrous financial results. The board ousted Johnson in April after only 17 months on the job and rehired Mike Ullman, who had been chief executive of the retailer from 2004 to 2011.
Ackman resigned from the board Aug. 13, after he went public with statements saying he’d lost confidence in Penney’s board and that Chairman Thomas Engibous should be replaced. Ackman and the board also were bickering over how quickly the company should replace Ullman.
In a letter to investors last week, Ackman admitted that the investment in Penney was a “failure” and that retail “has not been our strong suit.”
— Associated Press
l Stock exchange operator BATS Global Markets is buying Direct Edge to create the nation’s second-biggest stock exchange. The new company will account for about 21 percent of the approximately 6.5 billion shares that are traded daily on exchanges, according to BATS. It would leapfrog over the Nasdaq and rank behind the New York Stock Exchange. The combination is “an important milestone for the U.S. equities market,” said BATS chief executive Joe Ratterman, who will serve as chief of the merged company.
l Orders for long-lasting U.S. factory goods fell sharply last month as demand for commercial aircraft plummeted and businesses spent less on computers and electrical equipment. Orders for durable goods plunged 7.3 percent in July, the Commerce Department said Monday. It’s the steepest drop in nearly a year. Excluding the volatile transportation category, orders fell just 0.6 percent. Both declines followed three straight months of increases. Durable goods are items meant to last at least three years.
l ConAgra Foods is recalling some Kroger’s Break ’N Bake chocolate chip cookie dough packages because they contain peanuts, posing a danger to people with peanut allergies. No illnesses have been reported. The recall is limited to 16-ounce packages of Kroger’s Break ’N Bake Chocolate Chip cookie dough with the unit UPC code “11110 87530” and the use-by date “24NOV13C21.”
l The U.S. futures regulator on Monday barred Jeannie Veraja-Snelling from working as an accountant for firms it oversees after she failed to detect the massive fraud at failed brokerage Peregrine Financial. Veraja-Snelling, Peregrine’s longtime auditor, who ran her tiny accounting firm from a Chicago suburb, lacked the expertise to audit a futures brokerage, the Commodity Futures Trading Commission said in an order. Former Peregrine head Russell Wasendorf Sr. is serving a 50-year prison sentence for embezzling $215 million from clients in a fraud he hid for nearly 20 years, using the money to fund a lavish lifestyle.
— From news services
l 9 a.m.: S&P/Case-Shiller index of home prices for June and the second quarter released.
l 10 a.m.: Consumer confidence index for August released.
l Earnings: Tiffany.