Onyx Pharmaceutical shares up 50% on potential bidding war

The prospect of a bidding war for Onyx Pharmaceuticals Inc. in South San Francisco is sending biotechnology shares sharply higher, helping propel an advance in the broader stock market.

Onyx, a developer of anti-cancer drugs, said Sunday it had rejected a “significantly undervalued” takeover bid of $120 a share from Amgen Inc., the Thousand Oaks biotech giant.

But it added that it was “actively exploring” the possibility of selling itself to another bidder. That was all investors needed to hear, sending Onyx shares soaring by $43.74, a gain of more than 50%, in midday trading Monday.

PHOTOS: Tech giants’ new headquarters

The biotech segment of the market jumped more than 3%, Zachs analysts said, compared to a gain of about 1% for the Nasdaq exchange, where Onyx is traded.

Onyx and its German partner Bayer sell drugs to combat liver, kidney, stomach and blood cancers. The company lost $187.8 million on sales of $362.2 million in 2012, compared with a $76.1 million profit on revenue of $447.2 million in 2011.

Onyx and its German partner Bayer sell the drug Nexavar, which is given to liver and kidney cancer patients, and Stivarga, which is for stomach cancer. Onyx markets Kyprolis, a blood cancer drug approved in 2012, on its own.

The company reported a net loss of $187.8 million on revenue of $362.2 million in 2012. That compared with a profit of $76.1 million on revenue of $447.2 million in 2011.

ALSO:

Venture capital for biotech tanks

Onyx rejects Amgen takeover bid

Amgen aims to restock its medicine cabinet