Onyx Pharmaceuticals, whose cancer drugs promise a strong revenue stream, is attracting preliminary buyout interest from several large pharmaceutical companies such as Pfizer and Novartis, two people familiar with the matter said on Monday.

Onyx, a biotechnology company with a market value of around $9.5 billion, put itself up for sale on Sunday, citing "expressions of interest" from unnamed companies. It also said it had rejected a recent $8.7 billion offer from larger biotech Amgen as too low.

Pfizer, which is due to pay Onyx royalties on a promising experimental breast cancer drug, and Novartis, with a strong franchise of cancer medicines, are among the parties interested in Onyx and its portfolio of marketed cancer treatments, the two sources said.

Amgen's $120-per-share offer in June was its first and the company did not indicate if it was the best and final, according to a third person familiar with the matter, who expected Amgen to participate in the auction process. The offer represented a 38 premium to Onyx's Friday closing share price of $86.82. Onyx surged 51.3 to close at $131.33 on Nasdaq on Monday, well above Amgen's offer, suggesting investors expect bids to go much higher.

San Francisco-based Onyx could appeal to a wider group of large biotech and pharmaceutical companies, including Bayer, AstraZeneca and Merck & Co, several people familiar with the matter said.

All the sources in this story were not authorized to speak with the media and asked not to be identified. An Onyx spokesperson declined to comment beyond the company's statement on Sunday that it would reach out to potential buyers. Amgen, Pfizer, Novartis, Bayer and Merck declined to comment. AstraZeneca did not immediately return calls seeking comment.

Shares of other mid-size biotech companies that have long been rumored as potential takeover targets also rose on Monday, as takeover interest in Onyx underscored the sector's attractiveness.

Large pharmaceutical and biotech companies have been looking to acquire smaller biotech firms to gain access to new drugs, often high-priced cancer treatments, as they face significant revenue losses stemming from expired patents.

Onyx sells Nexavar, a treatment for liver and kidney cancer, and the new colon cancer drug Stivarga - both in partnership with Germany's Bayer. Onyx last year began selling Krypolis, which some analysts estimate will reach peak annual sales of $3 billion.

In addition to very high prices - some new oncology medicines can cost more than $100,000 per patient - cancer drugs are desirable because they require relatively small sales forces and tend to be covered by medical insurers.

Onyx is particularly attractive because it has three cancer drugs on the market - two of which are new with their best sales days ahead, while the third, Nexavar, is firmly established and being tested for additional uses. It has other promising drugs in its pipeline.

Amgen On Prowl

Amgen has faced growing pressure to beef up its drug development pipeline as safety concerns trimmed sales of its flagship anemia drugs. The company is best known for these and other medicines used in supportive care of cancer patients. Patents on four of Amgen's five top-selling drugs will expire, starting in 2015.

Amgen Chief Executive Bob Bradway, a former Morgan Stanley investment banker, took over from Kevin Sharer just over a year ago. Amgen shares have risen more than 30 since then as investors applauded the company's higher dividends and share repurchases. Amgen's late-stage pipeline has several cancer drug candidates, including some acquired through takeovers.

The company, which held more than $21 billion in cash at the end of March, has not done a deal for more than $1 billion since its buyout in 2006 of Abgenix for $2.2 billion. Amgen's largest acquisition so far is Immunex Corp, which was valued at about $10 billion when completed in 2002.