Analyst Conference Call Summary


Onyx Pharmaceuticals

conference date: August 3, 2011 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2011 (Q2, second quarter 2011)

Forward-looking statements

Overview: Spending a lot of investor cash while waiting for carfilzomib.

Basic data (GAAP) :

Revenues were $68.0 million, up 1% sequentially from $67.1 million, but down 1% from $68.8 million in the year-earlier quarter.

Net income was negative $54.5 million, down sequentially from negative $49.2 million, but improved from negative $97.2 million year-earlier.

EPS (earnings per share) were negative $0.86, down from negative $0.78, but improved from negative $1.55 year-earlier.

Comparisons: ONXX Q1 2011; ONXX Q2 2010


$225 to $250 million R&D expense for full 2011. SG&A consistent with current spending trends. Sees non-GAAP profitability in 2011.

Conference Highlights:

Plan is to fuel growth and diversify business with its proteasome inhibitor platform. Believes could lead to $2.5 billion annual global sales for multiple myeloma alone.

Non-GAAP numbers: net loss of $27.2 million, EPS negative $0.43.

Nexavar (sorafenib) for liver cancer and kidney cancer global sales by partner Bayer were $245.7 million, up 4% from $236.1 million year-earlier. Growth in Asia was strong, led by Japan and China, which has about 50% of global liver cancer cases. Five late-stage clinical trials are expected to release data by the end of 2012. "Decision" Phase III trial for thyroid cancer recently completed enrollment, with data in first half of 2012. Mix of revenue is moving from renal cancer to liver cancer.

Phase 3 confirmatory carfilzomib for multiple myeloma trials, ASPIRE and FOCUS, are in progress. Anticipating potential regulatory approval in first half of 2012, as an accelerated filing will be made in September or early October (a delay of four to five weeks). An expanded access program for carfilzomib is being created.

ONX 912 Phase Ib/II study for multiple myeloma will begin this quarter. See also Onyx Pharmaceuticals clinical pipeline.

There was also a non-cash expense of $5.8 million for changes in liability for milestone payments for Proteolix. There was a $10.7 million non-cash leas termination expense. Interest expense of $5 million was driven by 4% senior convertible notes accounting requirements.

Some expenses are from planning for launch of carfilzomib.

Cash and equivalents ended at $550.6 million.

Operating expenses of $117.8 million consisted of: $63.0 million for R&D, $38.2 million for general, selling, and administrative expense, $5.8 million for the contingent milestone liability, and the $10.7 million lease termination expense. Loss from operations was $49.8 million. Investment income $0.6 million. Interest and other expense $5.4 million.

Bayer litigation trial expected to start October 3rd. See is a litigation at Onyx investor page.


NDA timeline for carfilzomib? Have been able to incorporate analysis from other companies going through this process recently. External experts are helping us strengthen the NDA. Feedback from reviewers has been very helpful.

Response rate and overall survival? As previously reported, 24% overall response rate, consistent over subpopulations. Survival data is quite compelling, but FDA is limited in ability to interpret time data in single-armed trials. 15.6 months overall, best group 20.7 months, continuing to follow best responders.

Expanded access program authorized by FDA? It is foremost about patients with unmet need and Multiple Myeloma Research Foundation partnership.

R&D expense going forward? R&D expense has been expanding because of expense of carfilzomib trials and building inventory for commercial launch. There is some non-cash based stock compensation in R&D.

Are you going to license carfilzomib in Europe? Infrastructure build in Europe is largely regulatory and preparing for reimbursement. Will expand as needed. Corporate development could be any of our assets, in any territory, not just Europe. Wants to maintain a significant downstream right in Europe, whereas in Latin America and Asia it makes more sense to license carfilzomib.

The trend is for RCC (renal or kidney) portion to decline because of competition, while we expand liver cancer portion. Split is about 30/70 today.

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Copyright 2011 William P. Meyers