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Summary
conference date: August 8, 2006
for quarter ending: June 30, 2006 (2nd Quarter)
Overview: Good sales of Nexavar but expenses still exceed revenue and will for quite a while.
Basic data:
Revenues were $150,000.00, but Nexavar sales were $32.2 million (up 36% sequentially); all Nexavar income is recognized by Bayer.
Net loss was $31.5 million or .76 per share compared to year-earlier losses of $18.1 or .51 per share. Includes $3.7 million of stock based compensation expense.
Ended with $243.5 million in cash.
Guidance: Expenses will expand for worldwide ramp up, so next quarter's losses will increase over this quarter, while sales will be stable.
Conference Highlights:
Nexavar has been approved for use in the European Union and Canada. Marketing efforts are underway. Pricing has to be established in Europe, so revenue ramp will be slower than in U.S. Europe has 18,000 renal cancer deaths annually.
They and Bayer continue to invest in Nexavar. Onyx will not get revenue from the drug until revenue exceeds expenses for Bayer. The net Nexavar expense for Onyx was $12.5 million (which is paid to Bayer), so they have a long way to go before seeing revenues from the drug.
Phase III trials for non-renal cancers are underway (melanoma, lung and liver cancer). Will be doing trials combined with other drugs and at earlier stage of renal cancer. Will eventually do breast cancer and perhaps others; believes mode of operation of Nexavar indicates it will work for a variety of cancers and in combination with other drugs.
Q&A:
Melanoma Phase III data could be late 2006 or early 2007.
Japan filing & commercialization? Bayer has filed, no guidance on approval yet.
Pricing in UK? Reimbursement issues for government programs. Less off-label use.
Run rate for profitability? Invest in asset to achieve full potential. Not-pushing for short-term profitability.
Sequencing and multi-drug therapy give additional potential for sales.
Nexavar ratio of frontline to 2nd line treatment? Much sequencing going on, is seeing tremendous amounts of frontline use of Nexavar.
Overall, analyst questions were various forms of "when are we going to see profits?" and management's answer was, we are working for maximizing the long term by spending heavily on more clinical trials.
Does not think Interferon is the best combination for Nexavar. More interested in newer targetted agents.
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Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and our own analysis. They are not covered by any warranty. We cannot guarantee anything said by company representatives is true. Before making or terminating an investment you should always verify any factual basis of your decision.
Copyright 2006 William P. Meyers