In August, Amgen (AMGN - Get Report) announced plans to acquire Onyx for $10.4 billion in order to boost its sales and drug pipeline. The deal closed on Oct. 1. With shares returning 65% in nine months, my Onyx pick was a clear winner. Now, Amgen looks like a winner with its focus on oncology and a strong pipeline that could pay off in 2014.
When I selected Onyx, the company had only one full quarter of reported sales for Kyprolis, a treatment for multiple myeloma for patients who have received at least two other therapies. The $18.6 million posted in the third quarter of 2012 was higher than the $10.1 million estimated by analysts. In that short time, the drug had gained 10% market share in its field. The key here is Onyx owned the worldwide rights to the drug excluding Japan. Kyprolis has yet to be approved in Europe and is also in several trials to be a first or second treatment for myeloma.
Kyprolis had sales of $61 million in the second quarter of 2013. The drug is becoming the drug of choice by doctors and seems destined to hit once lofty targets. The drug is prescribed in more than 2,400 facilities, helping Amgen hold a 40% market share in third-line treatments. Analysts see sales of the drug hitting $2 billion to $2.4 billion, with some high targets in the $3 billion range.(BAYRY). Nexavar is approved globally to treat liver and kidney cancers. The drug generated $1.1 billion in 2012 sales, which equated to $300 million in revenue for Onyx. Stivarga treats colon cancer and is primarily owned by Bayer, which pays a 20% royalty to Amgen. Onyx's pipeline also includes drugs to treat breast cancer and thyroid cancer.