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) --I don't know how investors will react to the news this morning that

Onyx Pharmaceuticals




privately held


, but an initial email blast from Cannacord Adams' biotech analyst George Farmer to his clients is probably a fair, early assessment of the deal.

On the plus side, Farmer writes, Proteolix's lead multiple myeloma drug carfilzomib has reported encouraging data in studies treating very late-stage muliple myeloma patients. An FDA approval filing could be submitted next year and the drug has the potential to be a better Velcade, the $1 billion-plus multiple myeloma drug from


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The structure of the deal -- committing $276 million in cash up front – but with the remainder in earn outs tied to carfilzomib's success -- also seems fair to Onyx shareholders, says Farmer.

On the negative side, "if carfilzomib is so promising, why wasn't the company bought by


(CELG) - Get Celgene Corporation Report

or Takeda, the most likely contenders," Farmer asks.

Onyx must now also compete against Celgene and Takeda in a multiple myeloma market where it has no experience. Investors may worry that there is a problem with carfilzomib and that the aggressive FDA approval strategy using a single-arm registration study is risky, Farmer says.

BMO analyst Jason Zhang, reached by email, said the upfront payment by Onyx was less than he had expected and that the deal, "could be considered positive given how poor the stock has been."

More investor and analyst reactions to come as they pour in.

-- Reported by Adam Feuerstein in Boston

Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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