conference date: November 6, 2008 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2008 (3rd quarter 2008)
Overview: Better than expected quarter as Nexavar sales continue to ramp and expenses were lighter than most analysts anticipated.
Basic data (GAAP) :
Revenues from joint unconsolidated venture with Bayer were $39.9 million, up 32% sequentially from $30.2 million and up 127% from $17.6 million in the year-earlier quarter.
Net income was $12.2 million, up 171% from $4.5 million and way up from $0.6 million year-earlier.
EPS (earnings per share) were $0.21, up 162% sequentially from $0.08 and way up from $0.01 year-earlier.
On Non-GAAP basis Onyx will be profitable in 2008. Global sales $660 to $670 milion. $160 million collaboration expense for quarter, down $30 million for year from prior guidance.
Very pleased with Nexavar sales on overall performance. Onyx continues "building our leadership in the liver cancer market with ongoing product launches in multiple countries, including Italy and China." Continuing to invest in additional possible indications for Nexavar.
Net income is expected to continue to vary from quarter to quarter because of fluctuations in development expenses shared with Bayer. Currency fluctuation affected Q3
Global Nexavar sales reported by Bayer HealthCare were $180.9 million, up 73% from the year-earlier quarter.
Non-GAAP numbers, which exclude $4.3 million in stock-based compensation expense, were: net income $16.6 million or $0.29 per share.
Cash and securities ended at $488.2 million. Invested in conservative vehicles such as U.S. treasuries.
Margins have steadily improved.
Operating expenses were $30.3 million, including: R&D of $10.9 million and selling, general and administrative expense of $19.3 million. Income from operations was $9.7 million. Investment income was $2.8 million. Income taxes $0.2 million.
Will change accounting statements to comply with EITF 07-1, "Accounting for Collaborative Arrangements," as of December 31, 2008.
Nexavar now has over $1 billion accumulated sales. Kidney cancer was first. First stage of liver cancer launch has been well received. Believes some time in next 2 years Nexavar global revenues will hit $1 billion per year.
Colorectal and Ovarian cancer Phase II clinical trials for Nexavar are to be started. Non-small cell lung cancer Phase III study should finish enrollment in first half of 2009. Phase II and III trials for other cancers continue.
Now working on building a product portfolio beyond Nexavar. Now is a good time to use our cash reserves to acquire new products. Licensed ONX 0801 for tumor cells from BTG, superior to current similars because of selective uptake into cancer cells.
$133 international Nexavar revenues (at Bayer), $48 million U.S. revenues. Expanding sales team to promote Nexavar for liver cancer in U.S. Continues to penetrate Europe, where Italy has the highest liver cancer rate. Italy approved reimbursement for Nexavar during the summer, which helped with sequential growth. Now approved in China and Korea, but reimbursement is pending. Japan on line for first half of 2009.
In kidney cancer now approved in 70 countries, but this is a competitive segment. Recent analysis from Europe show Nexavar is helpful to certain metastasis types.
Guiding to sequentially down Q4? We try to work with Bayer to provide guidance. We believe Q4 will be good from a demand point of view. Question about currency exchange rates.
More specific geographic sales information? Most growth will come from Europe and Asia. All regions reported strong demand including Europe.
Foreign exchange hedging strategies? We have looked at them, we don't feel it is appropriate to hedge at this time. Partly because we have a natural hedge from our international expansion.
Pricing of Nexavar? U.S. had a price increase of 5% mid-quarter, international no price increase.
Any clinical plans for ONX 0801? Ovarian cancer seems to be of a type that could respond. Lung cancer also. Believes deal was attractively priced for both companies. Expenses will ramp up as Nexavar R&D expense winds down.
Asia revenue in Q4? We expect revenue from Japan, China, Korea and Taiwan, but expect that to ramp going forward.
Renal cancer market share? Continues to be about 20% world-wide. Despite new drugs in competition, because patients take drugs sequentially, Nexavar share is stable.
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