Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Amgen, Inc. (AMGN)-Onyx Pharmaceuticals, Inc. (ONXX) Deal Should Make All Biotech Investors Happy

Not a bubblicious price
Sure, Onyx investors would have preferred a higher price, but as an industry, reasonable prices are healthier. Crazy valuations can only last for so long. Eventually they fall back to reality (often below it).

Amgen’s final offer looks like a pretty decent price. At $125, I expected a CVR that would have given investors a piece of the upside if Onyx’s drugs exceeded expectations. Amgen’s investors sure seem to think the company got a good deal; shares are up 8% as I write this.

It’s clear Amgen and the other potential suitors that bowed out before then weren’t willing to go overboard to acquire Onyx. After the recent run up in biotech valuations and the ease that biotechs have had in going public, I’ve become increasingly worried that the valuations have gotten out of hand. Amgen’s lower-than-expected takeout price is a sign that there’s some sanity to the market.

The article The Amgen-Onyx Deal Should Make All Biotech Investors Happy originally appeared on is written by Brian Orelli.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Seattle Genetics.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.