2012 Press Releases
Onyx Pharmaceuticals Reports Third Quarter 2012 Financial Results
Kyprolis Net Sales of $18.6 Million in Launch Quarter; Stivarga Launch Underway in U.S.
South San Francisco, CA. Nov. 01, 2012
Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) today reported its financial results for the third quarter 2012. Onyx reported non-GAAP net loss of $51.8 million, or $0.79 per diluted share, for the third quarter of 2012 compared to non-GAAP net loss of $19.5 million, or $0.31 per diluted share, for the same period in 2011.
“Our accomplishments this quarter are unprecedented in the history of Onyx, transforming the company from having one approved therapy at the beginning of 2012 to having three approved therapies today,” said N. Anthony Coles, M.D., president and chief executive officer of Onyx. “In a single quarter, we have initiated the launches of Kyprolis and Stivarga, a Bayer product that we co-promote in the United States. Both therapies represent important medical progress, where the unmet needs remain significant for advanced cancer patients.”
Dr. Coles continued, “At the same time, Nexavar continues to generate cash flow and, together with Stivarga royalties and Kyprolis revenues, is expected to help offset our ongoing research and development investments. We are committed to growing the topline for all three of these innovative therapies and look forward to upcoming commercial, regulatory, and clinical milestones as we continue the momentum across our business.”
On a U.S. GAAP basis, Onyx reported net income of $17.4 million, or $0.25 per diluted share, for the third quarter 2012 compared to net loss of $36.9 million, or $0.58 per diluted share, for the same period in 2011. A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled “Reconciliation of GAAP to Non-GAAP Net Income (Loss).”
KyprolisTM (carfilzomib) for Injection net sales were $18.6 million for the third quarter of 2012, representing orders placed and received by end customers such as clinics and hospitals post approval. The U.S. Food and Drug Administration (FDA) granted accelerated approval of Kyprolis on July 20, 2012.
Nexavar® (sorafenib) tablets net sales, as recorded by Bayer, excluding Japan, were $208.2 million for the third quarter of 2012, compared to $208.7 million for the same period in 2011 as a decline in the dollar-Euro exchange rate between periods offset higher sales in various regions around the world. Revenue from the collaboration agreement was $70.7 million for the third quarter of 2012, a decrease of 6% compared to $75.0 million for the same period in 2011. Onyx’s share of collaboration commercial profit was $66.4 million in the third quarter 2012, compared to $65.7 million in the same period in 2011. Commercial margin increased to 64% for the third quarter 2012 compared to 63% for the third quarter of 2011. Onyx and Bayer are marketing and developing Nexavar, an anticancer therapy currently approved for the treatment of unresectable liver cancer and advanced kidney cancer in over 100 countries.
Stivarga® (regorafenib) tablets royalty revenue was $0.1 million for the third quarter 2012, following marketing approval by the FDA on September 27, 2012. Onyx receives a 20% royalty on Bayer’s global net sales of Stivarga in oncology.
Cost of goods sold were $0.5 million for the third quarter of 2012. Costs of goods sold and gross margin related to sales of Kyprolis are not representative of Onyx’s expectations of costs of goods sold or gross margin, because most costs associated with third quarter Kyprolis sales were charged to research and development expense in periods prior to approval.
Non-GAAP research and development expenses were $83.3 million for the third quarter 2012, compared to $56.5 million for the same period in 2011. Higher non-GAAP research and development expenses between periods were primarily due to increased investments in Kyprolis development, particularly the Phase 3 ASPIRE, FOCUS, and ENDEAVOR trials, continued support of smaller Kyprolis trials and expensing commercial supply that was manufactured prior to the U.S. approval and launch of Kyprolis. On a GAAP basis, research and development expenses were $85.7 million for the third quarter 2012, compared to $58.5 million for the same period in 2011.
Non-GAAP selling, general and administrative expenses were $55.3 million for the third quarter 2012, compared to $36.0 million for the same period in 2011. Higher non-GAAP selling, general and administrative expenses between periods were primarily due to investment in commercial infrastructure and associated support to prepare for the U.S. launch of Kyprolis. On a GAAP basis, selling, general and administrative expenses were $61.7 million for the third quarter 2012, compared to $42.6 million for the same period in 2011.
Amortization expense for acquired intangible assets of $4.1 million for the third quarter of 2012 reflects the initiation of amortization of a portion of the in-process research and development intangible asset, which was acquired in the 2009 acquisition of Proteolix, Inc. following the U.S. approval of Kyprolis.
Provision for Income Taxes
Provision for income taxes for the quarter ending September 30, 2012 primarily consists of a $95.8 million non-cash tax benefit to recognize a change in the net deferred tax balance resulting from the U.S. approval of Kyprolis.
Cash, Cash Equivalents and Marketable Securities
On September 30, 2012, cash, cash equivalents, and current and non-current marketable securities were $573.0 million, compared to $668.4 million at December 31, 2011. This decrease was largely due to investments in Kyprolis development and commercialization, partly offset by revenue from the Bayer collaboration.
Nexavar net sales as recorded by Bayer, excluding Japan, were $632.4 million and $608.5 million for the nine months ended September 30, 2012 and 2011, respectively. Revenue from the collaboration agreement was $215.5 million and $210.1 million for the nine months ended September 30, 2012 and 2011, respectively. Non-GAAP net loss for the nine months ended September 30, 2012 was $138.9 million, or $2.16 per diluted share, compared to $60.9 million, or $0.96 per diluted share for the same period in 2011. For the nine months ended September 30, 2012, on a GAAP basis Onyx recorded net loss of $144.9 million, or $2.25 per diluted share, compared with net loss of $140.6 million, or $2.22 per diluted share, for the same period in 2011.
Non-GAAP Financial Measures
This press release includes the following non-GAAP financial measures: non-GAAP net loss, non-GAAP net loss – diluted, non-GAAP net loss per share, non-GAAP net loss per share – diluted, non-GAAP research and development and non-GAAP selling, general and administrative. The following tables reconcile these non-GAAP measures to the most comparable financial measures calculated in accordance with GAAP.
Onyx management uses these non-GAAP financial measures to monitor and evaluate our operating results and trends on an on-going basis and internally for operating, budgeting and financial planning purposes. Onyx management believes the non-GAAP information is useful for investors by offering them the ability to better identify trends in our business and better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expense that affect Onyx. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or as an alternative to, measurements required by GAAP. A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled “Reconciliation of GAAP to Non-GAAP Net Income (Loss).”
Non-GAAP operating expenses exclude stock-based employee compensation expense, the write-off of certain research and development expenses, contingent consideration expense, imputed interest related to the convertible senior note due 2016, equity investment impairment, impact of the S*BIO termination, lease termination exit costs, amortization of acquired intangibles and related tax impact of this amortization.
Recent Clinical Development and Regulatory Highlights
Proteasome Inhibitor Franchise
- In October 2012, Onyx completed enrollment in the FOCUS trial, an international Phase 3 clinical trial evaluating single-agent Kyprolis in patients with relapsed and refractory myeloma who have received three or more prior therapies. The FOCUS trial is designed to support regulatory approvals around the world.
- In July 2012, the U.S. FDA granted accelerated approval of Kyprolis™ (carfilzomib) for Injection for the treatment of patients with multiple myeloma who have received at least two prior therapies, including bortezomib and an immunomodulatory agent, and have demonstrated disease progression on or within 60 days of completion of the last therapy. The indication for Kyprolis is based on response rate. Currently, no data are available for Kyprolis that demonstrate an improvement in progression-free survival or overall survival. For full prescribing information, visit http://www.kyprolis.com.
- In July 2012, Onyx initiated the ENDEAVOR trial, a Phase 3 trial evaluating Kyprolis in combination with dexamethasone, versus bortezomib (Velcade®) with dexamethasone in patients with relapsed multiple myeloma. ENDEAVOR is the first of two head-to-head trials planned by Onyx.
- In July 2012, Blood, the medical journal of the American Society of Hematology, published results from the 003-A1 Phase 2b trial, a single-arm, multicenter clinical trial evaluating Kyprolis for the treatment of patients with advanced multiple myeloma, who had received a median of five prior anti-myeloma regimens.
Kinase Inhibitor Franchise
- In September 2012, the U.S. Food and Drug Administration (FDA) approved Bayer’s Stivarga® (regorafenib) tablets for the treatment of patients with metastatic colorectal cancer (mCRC) who have been previously treated with currently available therapies (including fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF therapy, and, if KRAS wild type, an anti-EGFR therapy). The approval of Stivarga is based on results from the pivotal Phase 3 study (CORRECT) that demonstrated improvement in overall survival (OS) and progression-free survival (PFS) compared to placebo in patients with mCRC whose disease had progressed after approved standard therapies. For full prescribing information, visit http://www.stivarga-us.com.
- In September 2012, the Japanese Ministry of Health, Labor and Welfare (MHLW) granted priority review to Bayer’s New Drug Application (NDA) for regorafenib for the treatment of patients with unresectable, advanced/recurrent CRC.
- In October 2012, the U.S. FDA granted priority review to Bayer’s supplemental NDA (sNDAfor regorafenib for the treatment of metastatic and/or unresectable gastrointestinal stromal tumors (GIST) in patients whose disease has progressed despite prior treatment. The sNDA was submitted in August 2012 with the FDA.
Management Conference Call Today
Onyx will host a webcast and conference call with management to discuss third quarter 2012 financial results, as well as provide a general business overview, today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).
To access a live audio webcast of the conference call, log onto the company’s website at:
To access the live conference call, dial 847-585-4405 and use the passcode 33476074#. A replay of the call will be available on the Onyx website or by dialing 630-652-3042 and using the passcode 33476074# approximately one hour after the teleconference concludes through November 15, 2012.
About Nexavar® (sorafenib) tablets
Nexavar is approved in the U.S. for the treatment of patients with unresectable hepatocellular carcinoma and for the treatment of patients with advanced renal cell carcinoma.
For information about Nexavar including U.S. Nexavar prescribing information, visit www.nexavar.com or call 1.866.NEXAVAR (1.866.639.2827).
About Kyprolis™ (carfilzomib) for Injection
On July 20, 2012, the U.S. Food and Drug Administration (FDA) granted accelerated approval of Kyprolis™ (carfilzomib) for Injection for the treatment of patients with multiple myeloma who have received at least two prior therapies including bortezomib and an immunomodulatory agent (IMiD), and have demonstrated disease progression on or within 60 days of completion of the last therapy. Approval was based on response rate. Clinical benefit, such as improvement in survival or symptoms, has not been verified.
Full prescribing information is available at http://www.kyprolis.com.
About Stivarga® (regorafenib) tablets
Stivarga is approved in the U.S. for the treatment of patients with mCRC who have been previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-VEGF therapy, and, if KRAS wild type, an anti-EGFR therapy. For full prescribing information, visit www.stivarga-us.com.
Important Safety Information for Stivarga® (regorafenib) tablets
WARNING: HEPATOTOXICITY: Severe and sometimes fatal hepatotoxicity has been observed in clinical trials. Monitor hepatic function prior to and during treatment. Interrupt and then reduce or discontinue Stivarga for hepatotoxicity as manifested by elevated liver function tests or hepatocellular necrosis, depending upon severity and persistence.
About Onyx Pharmaceuticals, Inc.
Based in South San Francisco, California, Onyx Pharmaceuticals, Inc. is a global biopharmaceutical company engaged in the development and commercialization of innovative therapies for improving the lives of people with cancer. The company is focused on developing novel medicines that target key molecular pathways. For more information about Onyx, visit the company's website at www.onyx.com.
This news release contains “forward-looking statements” of Onyx within the meaning of the federal securities laws. These forward-looking statements include, without limitation, statements regarding our expected financial results for 2012, investments inand launch of Kyprolis and our oral proteasome inhibitor oprozomib, generation of cash flows from sales of Nexavar, commercial, regulatory, and clinical milestones, royalties on Bayer’s global net sales and development of Stivarga, promotion of Stivarga in the U.S., overall costs or gross margin from sales of Kyprolis and our future clinical trials. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including, but not limited to, risks and uncertainties related to: Nexavar® (sorafenib) tablets, KyprolisTM (carfilzomib) for Injection and Stivarga® (regorafenib) tablets being the only approved products from which we may obtain revenue; competition; failures or delays in our clinical trials or the regulatory process; dependence on our collaborative relationship with Bayer; supply of Nexavar, Stivarga or Kyprolis; market acceptance and the rate of adoption of Nexavar, Stivarga and Kyprolis; pharmaceutical pricing and reimbursement pressures; serious adverse side effects, if they are associated with Nexavar, Stivarga or Kyprolis; government regulation; possible failure to realize the anticipated benefits of business acquisitions or strategic investments; protection of our intellectual property; the indebtedness incurred through the sale of our 4.0% convertible senior notes due 2016; and product liability risks. Reference should be made to Onyx’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission, as updated by Onyx’s subsequent Quarterly Reports on Form 10-Q, under the heading “Risk Factors” for a more detailed description of these and other risks. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this release. Onyx undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release except as required by law.
KyprolisTM (carfilzomib) for Injection
Nexavar® (sorafenib) tablets is a registered trademark of Bayer HealthCare Pharmaceuticals, Inc.
Stivarga® (regorafenib) is a Bayer compound being developed by Bayer. Onyx receives a 20% royalty on global net sales in human oncology. Bayer and Onyx are jointly promoting Stivarga in the U.S.