Onyx Pharmaceuticals Inc. (NASDAQ:ONXX), which develops cancer drugs, could soon be the target of a bidding war, as it has attracted interest from pharmaceutical majors Pfizer Inc. (NYSE:PFE) and Novartis AG (NYSE:NVS), after a takeover offer from Amgen Inc. (NASDAQ:AMGN) fell through, Reuters reported.

Onyx, a South San Francisco-based company with a market value of around $9.5 billion, said it rejected a recent offer worth $8.7 billion from Amgen, according to Reuters, saying the offer price was undervalued. Onyx’s appeal stems from the fact that it has three cancer drugs in the market, one of which -- Nexavar -- has grabbed a sizeable market share and is currently undergoing testing for additional uses.

Pfizer, which owes royalties to Onyx for a breast cancer drug under trial, and Novartis, which is trying to strengthen its cancer medicine franchise, have expressed interest in Onyx, Reuters reported, citing unnamed sources.

Amgen, which offered $120 a share for Onyx, has not indicated that it's out of the bidding race, Reuters reported, citing a third source, who added it was likely Amgen would participate in the buyout auction.

Onyx shares gained more than 50 percent to close at $131.33 on Nasdaq on Monday, indicating that investors expected takeover bids to climb higher, Reuters reported, as companies such as Bayer AG (OTCMKTS:BAYRY), AstraZeneca PLC (NYSE:AZN) and Merck & Co. Inc. (NYSE:MRK) were also among those eyeing Onyx, the report said.

Pfizer has obtained the license to market a drug developed by Onyx called Palbociclib, which has been designated as a breakthrough in treating breast cancer and is currently awaiting approval from the U.S. Food and Drug Administration, Forbes reported. The drug has the potential to generate annual sales of $3 billion, of which 8 percent will go to Onyx as royalty, the report added.

German drugmaker Bayer, which partnered with Onyx to sell Nexavar, generating $861 million in annual sales last year, has also gained favor among investors as a potential bidder, Forbes said.

Onyx also presents a lucrative opportunity for Amgen, which is under mounting pressure to revamp its drug development program after a breakdown in sales of its flagship anemia medicine over safety concerns, while patents on four of Amgen’s five best-selling drugs are slated to expire starting in 2015.