We recently reiterated our Neutral recommendation on
Onyx Pharmaceuticals, Inc.
). 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
) 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
) 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
) 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
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