Onyx Pharmaceuticals on Sunday confirmed it had rejected an offer from Amgen to buy the company in a deal valued at about $10 billion.
Amgen, the world's largest biotech company, offered to buy Onyx for $120 a share in cash, which represents a premium of about 38 percent to Onyx's Friday closing price of $86.82.
The company said the offer price "significantly undervalued" its prospects and that it was "actively exploring" the potential to combine with another company.
"Based upon expressions of interest received from other third parties and the recent proposal from Amgen, the Onyx Board has authorized its financial adviser to contact potential acquirers," the San Francisco-based company wrote in a statement.
Onyx has a market cap of $6.32 billion and revenue of $362 million in 2012, according to Thomson Reuters data, while Amgen has a market cap of about $74 billion, based on its Friday closing price of $98.66.
The Financial Post reported the offer on Friday, sparking a steep jump in Onyx shares in after-hours trading.
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ISI Group analyst Mark Schoenebaum recently wrote that if a deal were to be made, Onyx's Kyprolis cancer drug would fit well into Amgen's cancer drug sales and marketing infrastructure and complement Amgen's portfolio of cancer drugs.
Kyprolis, developed for patients with multiple myeloma who have received at least two prior therapies, was approved by the Food and Drug Administration last July.