Analyst Conference Call Summary

biotechnology

conference date: May 2, 2012 @ 2:00 PM Pacific Time
for quarter ending: March 31, 2011 (Q1, first quarter 2012)

Forward-looking statements

Overview: Net losses increased y/y despite revenue increase mainly from increased R&D expense.

Basic data (GAAP) :

Revenues were $72.0 million, down sequentially from $237.0 million (which included 1 time revenue), but up 7% from $67.1 million in the year-earlier quarter.

Net income was negative $56.2 million, down sequentially from $216.7 million, and also down significantly from negative $49.2 million year-earlier.

EPS (earnings per share) were negative $0.88, down sequentially from $3.40 and also down from negative $0.78 year-earlier.

Comparisons: ONXX Q4 2011; ONXX Q1 2011

Guidance:

Conference Highlights:

Kyprolis is the likely commercial name for carfilzomib for multiple myeloma. There will be an FDA ODAC (Oncology Drugs Advisory Committee) meeting in June to assess the therapy. Noted there is a high bar for accelerated approval since the current data is from single-arm trials. Phase III trials are also underway under a SPA (special protocol assessment) and data could be available by mid 2013.

Non-GAAP numbers: net income negative $43.5 million, down sequentially from $102.8 million and down from negative $14.2 million year-earlier. EPS $0.68, down sequentially from $1.50 and down from negative $0.23 year-earlier.

Nexavar (sorafenib) for liver cancer and kidney cancer global sales by partner Bayer were $243.3 million ($210 million excluding Japan), down sequentially from $276.8 million but up from $235.5 million in the year-earlier quarter. Asia is seeing strong growth. Actual Nexavar revenue to Onyx was $72.0 million.

Cash and equivalence balance ended at $622.4 million, down sequentially from $668.4 million.

The FDA will have an advisory committee review carfilzomib for relapsed and refractory multiple myeloma on June 20, 2012. The deadline for an FDA decision is July 27, 2012.

Regorafenib has positive trial results, and if commercialized would result in a 20% royalty from Bayer. Onyx will co-promote regorafenib in the U.S. Bayer is planning global filings for this year for colorectal cancer.

Nexavar Phase 3 data for lung cancer and thyroid cancer results should be available this year, but the exact timing is uncertain as they are event driven (requiring waiting for patient deaths, so the better the drug is doing, the slower the results).

Oprozomib, an oral therapy for multiple myeloma, is in a Phase 1b/2 trial with data possible by the end of 2012.

See also Onyx Pharmaceuticals clinical pipeline.

Operating expenses of $122.8 million included $80.7 million for research and development, $38.9 million for general, and $3.2 million for a contingent consideration. Loss from operations was $50.8 million. Interest and other expense was $5.4 million.

Q&A:

Kyprolis Phase III trial details? We are collecting prior K-ras tumor data. Subgroups have been looked at and Kyprolis is consistent across them.

R&D expense in quarter? We had clinical trial expenses and drug supply costs of Kyprolis pre-launch.

ODAC for Kyprolis? Looked at relaxed and refractory MM. It was known to be hard to achieve a response. The response rate 23%. Duration of response was 7.8 months. The data is publicly available.

Carfilzomib neuropathy rate has been lower than for Velcade.

Nexavar in China? $21 million sales by Bayer.

ODAC likely issues? We don't have details, but we have been preparing and having discussions with the FDA.

At ASCO you will see the data about carfilzomib (Kyprolis) for double refractory patients. It will be data worth noting.

006 study effect on regulatory discussions? It is not relevant at ODAC for efficacy. Ongoing reports from it are not likely to give new meaningful data. It had an overall 72% response rate.

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