Jefferies Upgrades Onyx Pharmaceuticals (ONXX) to Buy; FDA Approves Kyprolis; Takeover Speculation Intensifies

Jefferies upgraded Onyx Pharmaceuticals (NASDAQ: ONXX) from Hold to Buy with a price target of $101.00 (from $55.00).

Analyst, Biren Amin, said, "Kyprolis (carfilzomib) received FDA approval for RRMM a week ahead of its PDUFA date with an in-line label. With improved Kyprolis commercial outlook driven by better-than-expected pricing and limited near-term downside, we are upgrading ONXX to Buy..." (FY14 EPS estimate raised from (1.20) to $0.57)

"With the intensifying takeout speculation on ONXX, we performed a M&A analysis showing ONXX could offer a $7.5B gain in EV (NewCo v acquirer on DCF), supporting a takeout price of ~$122/shr (a ~61% premium to the current $76/shr valuation and ~21% upside to our $101 PT). Our analysis uses Bayer as a “template acquirer” but there may be upside to EV gain for other potential acquirers with a larger heme/onc presence (e.g. Novartis (NYSE: NVS)(Buy) on improved synergies."

For an analyst ratings summary and ratings history on Onyx Pharmaceuticals click here. For more ratings news on Onyx Pharmaceuticals click here.

Shares of Onyx Pharmaceuticals closed at $76.38 yesterday.

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