conference date: November 3, 2010 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2010 (third quarter 2010)
Overview: Soaring revenue and profit as Carfilzomib Japanese upfront payment marks beginning of potential license revenue.
Basic data (GAAP) :
Revenues were $122.9 million, up 79% sequentially from $68.8 million and up78 % from $69.1 million in the year-earlier quarter.
Net income was $41.5 million, up sequentially from negative $97.2 million, and up a factor of 5 from $8.2 million year-earlier.
EPS (earnings per share) were $0.66, up sequentially negative $1.55 and up from positive $0.14 year-earlier.
Comparisons: ONXX Q2 2010; ONXX Q3 2009
Reduced full 2010 estimate to $905 to $925 million global Nexavar sales. No guidance on Carfilzomib revenue.
Revenues from carfilzomib were $59.2 million, from Nexavar collaboration were $63.7 million. Carfilzomib was acquired with Proteolix. Government intervention is creating pricing pressure in some nations of Europe.
Nexavar (sorafenib) for liver cancer and kidney cancer global sales by partner Bayer were $226.2 million, down 2% from $229.2 million year-earlier. Onyx received $63.7 from Bayer, down 8% from $69.1 million year-earlier. Exchange rates reduced international revenue growth. 18% growth in Japan. China is currently driven by the self-pay market; half of liver cancer cases are Chinese.
Non-GAAP net income was $55.3 million, for EPS of $0.84, about 2.5 times year-earlier $22.2 million or $0.35/share.
Partnership with Ono Pharmaceutical Co. Ltd for developing carfilzomib was signed in the quarter. "In the near term, we expect to build a franchise opportunity in the multiple myeloma market with carfilzomib and ONX 0912," plus new indications for Nexavar. There is also an exciting pipeline for the future.
Ono deal has the potential to total $300 million in revenue. The Q3 revenue was the upfront payment. Carfilzomib needs to be developed globally. Data is being generated on other indications besides multiple myeloma. A trial for supporting European registration has begun, with data due in early 2012. A large Phase III trial informed by the FDA should be fully enrolled in 2012. See also Onyx Pharmaceuticals clinical pipeline.
Nexavar thyroid cancer Phase II data demonstrated 84 weeks progression-free survival.
Cash and equivalents ended at $588.0 million.
Operating expense was $76.1 million, including: $44.6 million for research and development, $25.9 million for selling, general and administrative, and $5.6 million for contingent consideration re Proteolix acquisition. Leaving income from operations of $46.7 million. Investment income $0.6 million. Interest expense $4.9 million. Other expense $0.9 million. Income taxes near zero. Employee based stock compensation was $5.9 million.
Carfilzomib ASH data to look for? Abstracts will come out next week. Full Phase 2b data set will be presented orally. Earlier lines of therapy data will also be released.
Nexavar sequential revenue issues? Productivity of non-oncology segment means patients tend to be treated earlier and longer. In U.S. we saw a small inventory build, $3 million, at the end of Q2.
ASPIRE trial, which is a very large international trial of Carfilzomib with relapsed myeloma, might complete enrollment in the first half of 2012.
Despite only 140,000 thyroid cancer cases world wide, the duration of therapy would be longer than with many more prevalent cancer types.
Lots of questions about why not file with FDA with carfilzomib early, repeated that after discussions with FDA thought that was not the best path.
We expect Nexavar sales to continue to grow in the U.S., Europe, and Asia. That will accelerate when we get approval for another indication.
JAK compound options have not been exercised yet.
Nexavar Phase 2 breast cancer additional data should be released this year.
Acquisition plans? Right now are focused on carfilzomib. Will continue to be opportunistic about enhancing the pipeline.
Kidney (renal cell) cancer percentage of sales? It is the smaller proportion of the business, and mentioned it has become a more competitive market. Note Nexavar continues to benefit kidney cancer patients. We are focused on the growth opportunity in live cancer.
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